In this, my third, article I want to congratulate the Greens for bringing the climate change policy debate back to adaptation, and castigate the Nats for not making more of their own work in this area. My key message is that climate change adaptation brings certainty of eventual (possibly quite high) benefits to NZ, but our mitigation strategies have no world impact and a high risk of undermining our internationally competitive advantage.
Greens Draw Attention to Adaptation
The Greens deserve credit for bringing climate change adaptation into the current pre-election debate. Their 3 September leak of the initial draft of the MfE “Coastal Hazards and Climate Change; Guidance For Local Government” report highlights the importance to New Zealand of thinking early about how to adapt to climate change. They also have a valid point in criticising National for not making more of the work to date on climate change adaptation.
Adaptation – Low Risk and Certainty of Eventual (High) Benefits
There is little debate that some level of sea level rise is likely with climate change. And some debate about how effective international efforts to mitigate climate change might be. Starting to think now about how we might adapt to climate change, including possible sea level rise scenarios, will almost certainly pay off at some point. The MfE Coastal Hazards report is a good start in this thinking. Staring such thinking now could bring disproportionately large benefits later. For example Dunedin City Council’s initial work on protecting South Dunedin from sea level rise suggested $3B worth of assets could be protected for about $160M worth of work, which is not needed for some years (sea levels rise slowly). Most councils have already done some work in this area but a Coastal Hazards Guideline would provide further tools and a more standard approach.
Mitigation – Uncertain Benefits and High Risk
Much of the political debate on climate change policy seems to assume we can somehow influence international climate change mitigation outcomes. But our ability to impact international emissions is almost non-existent. What our policy settings can impact is our budget surpluses. Because our policy settings (on which industries have to pay for emissions) can have a huge impact on our overall international competiveness, and hence our budget surpluses.
NZ Less 0.02% of Total Emissions
By my calculation (see previous article) New Zealand’s forecast total greenhouse gas emissions to 2040 are about 0.014% of total world emissions. Our mitigation strategy, e.g. our ETS settings, can move us to say 0.010% or 0.020%. That change is not going to impact world climate change trajectories. But it could risk our economic competiveness, and hence the source of the budget surpluses the politicians are busy promising to spend. The sectors most exposed to international competition are often the same ones generating jobs, profits, and tax that impact our budget surpluses.
Agricultural Trade Highly Competitive
A lot of our budget surplus is built on the back of our currently well performing agricultural sector. Huge effort has gone into building up our competitive position in world agricultural trade over many years. But let’s not kid ourselves about just how competitive those markets are and how quickly they can turn around. Anything that hinders our international competitiveness, such as an emissions cost on industries competing in international markets, could kill our budget surplus, even faster than a politician can promise to spend it.
Lost Opportunity for Nats to Build on Current Adaptation Work
When the Greens leaked the draft MfE Coastal Hazard guidelines National missed an opportunity to not only claim credit for starting this work but to propose to take it further.
Climate Change Adaptation Technical Working Group Needs a Rev Up
Paula Bennett set up the Climate Change Adaptation Technical Working Group (under MfE) in July 2016, but they have yet to actually deliver anything. Although I must give MfE some credit for the initial draft Coastal Hazard Guidelines. If National really wanted to give New Zealanders some confidence about how we can handle climate change, regardless of what the rest of the world does, they should have proposed a strengthening of this climate change adaptation work. One obvious area would include finalising the Coastal Hazards Guidelines, including perhaps reviewing some parts as more information about observed rates of sea level rise acceleration become available, such as Statistics NZ proposed updating the sea level rise statistics for all major New Zealand cities in October 2017.