By Stuart Evans


September 13, 2018 05:00:00

As Australia prepares for another climate policy reset, it’s easy to look to New Zealand and wonder what might have been.

Like Australia, New Zealand is one of the world’s largest per capita emitters and for many years both countries developed their climate policy in tandem.

But as Australia adjusts to another prime minister undone by climate change, New Zealand has just released its comprehensive roadmap for transition to a low emissions economy.

The New Zealand Productivity Commission’s Low Emissions Economy report presents a comprehensive strategy to move toward a net-zero emissions economy.

It makes a clear case that it is possible to reduce emissions and remain competitive, even in an uncertain and rapidly changing international environment.

To enable this shift, it calls for a political commitment to stable and credible policies that enable households and businesses to make decisions with confidence.

What it doesn’t mention is that this report is the product of a two-year process of consensus building, which is creating the stable and credible climate policy that it demands.

This clear direction is a new phenomenon. In the last decade, New Zealand’s National and Labour parties have regularly faced-off over its emissions reduction policy and targets.

The resulting policy backflips saw an emissions trading system introduced, and then hamstrung, all the while New Zealand ignored the elephant in the room. Or in its case, the cow.

Australia has coal, NZ has cows

Where Australia has coal, New Zealand has dairy. It is its largest emitter, largest export earner and the base for a vocal regional constituency.

But whereas Australia has failed to recruit its large emitters in support of climate policy, New Zealand has aligned its industry behind a rare consensus.

Political momentum is usually driven by ministers, but in New Zealand it came from the backbench.

In 2016, a cross-party group of 35 representatives came together to form Globe-NZ.

These representatives spanned all major parties, including the Nationals, Labour, Greens and the populist New Zealand First.

Globe-NZ’s mandate was to build a shared evidence base, and they commissioned us to evaluate the feasibility of transitioning to a low-emissions economy.

This research was buttressed by a country-wide series of workshops, presentations and meetings to collect evidence, test assumptions and socialise findings amongst a growing network of supporters.

Constituents ‘may think they have entered an alternate universe’

The resulting report, Net Zero in New Zealand, resonated with its conclusion that the country was off-track but could green its economy through innovation and modest changes to its agricultural system.

Convening a first-of-its-kind special parliamentary debate, politicians from across the spectrum lined up to back the report.

This show of partisan agreement caused then climate change minister Paula Bennett to remark that her constituents “may think they have entered an alternate universe. Here on a Thursday afternoon in Parliament… having a debate where we all kind of agree with each other on a cross-party piece of work”.

Following the last decade of discord, this alternate universe is one that most Australians would happily inhabit.

Policy uncertainty a dead weight on investment

So what can Australia learn from New Zealand’s experience?

First, that we should agree where we’re going before discussing how best to get there.

The climate debate often gets bogged-down in policy details instead of presenting a vision of a nation benefitting from cutting emissions and managing the trade-offs this entails.

This shared vision shows that a transition is not only feasible, but brings opportunities in new and established industries and markets.

In doing so it exposes the absurdity of claims that the slightest action is akin to an economic wrecking ball.

Second, that the cost of delay is mounting.

The resounding finding of the Productivity Commission’s modelling is that early action is almost always a winning economic strategy, even if other nations are slow to act.

Betting on the wrong market, investing in the wrong technology or failing to upgrade when it’s needed simply leads to later, more disruptive changes.

This is a warning for Australia, where policy uncertainty is acting as a dead weight on investment, and our reliance on outdated technologies is stretching the energy system beyond its capacities.

Politicians can set an example, as NZ backbenchers did

Third, and most importantly, that our current divisions need not define our future.

With clear-eyed analysis and good faith engagement, we can harness the ideas of businesses, farmers, academics and environmentalists to find solutions to complex problems like climate change.

Politicians can set an example, as New Zealand’s backbenchers did through the unifying acts of Globe-NZ.

But where this fails, our civil society groups can take the lead to shape a consensus vision for a low emissions Australia.

As New Zealand prepares to legislate its clean growth strategy through a Zero Carbon Bill, Australia’s politicians should take their lessons to move beyond our current policy paralysis.

While recent experience suggests these are lessons the Government may wish to ignore, they are lessons they should not be allowed to easily forget.

Stuart Evans is a senior economist at Vivid Economics.












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