Comment

Oram: National needs to come through on climate

New climate change legislation is soon to come before Parliament. The crucial question is whether National will make the mistake of listening to the foot-draggers in farming and walk away from cross-party support for ambitious change, writes Rod Oram.

Within the next few weeks, Climate Change Minister James Shaw intends to announce the outlines of the Zero Carbon Bill the Government plans to bring to Parliament in February.

Without doubt, this will be the most important piece of legislation in generations. If it is designed and executed well, it will guide our transition to a low carbon, wealthier, more resilient and more sustainable nation over the next three decades.

To achieve those goals, the legislation has to have cross-party support. That’s the only way we can break free from short-term political machinations to work together on these long-term challenges. Across society, not just business, we need consistency of goals, policies and processes to tackle these exceedingly complex issues.

The UK pioneered this approach a decade ago. Currently more than 20 national and regional jurisdictions are using it to great effect.

Over the past three years, backbench MPs from all parties have shown how this works. They formed the NZ chapter of GLOBE, an international organisation of members of parliaments and legislatures focused on environmental issues; they worked on gaining a common understanding of the climate change imperatives; they commissioned a major study of New Zealand’s pathways to a net zero carbon economy; and they agreed a seven-point policy statement.

There were many positive aspects of that all-party journey, but the most remarkable was the near-eight hour debate on the net zero study just before Parliament rose for its Easter recess in 2017. Members from all parties spoke in highly constructive, non-partisan terms. Sitting through the entire replay on Parliamentary TV would be a bit of a mission. But it’s well worth skipping through some of it to get the flavour of Parliament at its very best.

The new Government last year brought a significantly bigger ambition and higher priority to climate change. To further this work in a cross-party spirit, Shaw has been meeting regularly with Todd Muller, National’s climate spokesman.

They are saying next-to-nothing about the progress of those talks. We might know more when Shaw outlines the bill soon. Alternatively, they could agree on some crucial aspects of the bill in private, leaving National to go public when the bill gets to the House to maximise the impact of its support.

Broadly speaking, the bill needs three key features to achieve cross-party support:

- clear signs National has helped shape the bill rather than simply signing on to a Labour-led climate policy;

- an architecture that sets the key goal of net zero carbon emissions by 2050 and establishes an independent climate commission to set successive, science-driven, carbon budgets (most likely five-year ones) to steer the economy to that goal and to review the effectiveness of Government policies along the way; and

- encouragement to business and society at large that economic and other benefits will flow from this transformation.

Business on board

Overall, many business leaders strongly support this approach thanks to a big shift in their sentiment over the past few years. Up until say 2015, they had welcomed the National-led government compromising the Emissions Trading Scheme to the point it gave no useful signal on the price of carbon.

But once the Paris climate change agreement in 2015 reinvigorated global action they began to worry that New Zealand was drifting. The danger was we would lose competitiveness and accumulate climate liabilities. Their anxiety rose in the run up to last year’s election. They worried that if National won a fourth term it would continue to pay only lip-service to climate issues.

In response, the CEOs of 14 major companies created the Climate Leaders Coalition under the auspices of the Sustainable Business Council, part of Business New Zealand. With KPMG, Orion and Suncorp the most recent companies to join, the coalition now numbers 71 members. The companies’ emissions account for some 60 percent of New Zealand's emissions.

This is probably the biggest, most representative business climate group of its type in any country. However, it has three major challenges: some of its members have made to date only modest climate commitments of their own; even the most ambitious ones have yet to articulate goals and strategies that would put them on the road to truly low or net zero emissions; and they are still too polite and timid in their urging of National to get serious about climate change.

National would be dead wrong if it mistook this reticence as evidence that business will always be far more supportive of a centre-right government than a centre-left one. The New Zealand Herald’s Mood of the Boardroom survey shortly before last year’s election revealed a dramatic shift in the priorities of business leaders on a whole range of issues not just climate. Out went simplistic ones such as low taxes and small government, and in came deeply challenging ones such as productivity, inequality and housing affordability.

Clearly, many business leaders believed National had failed in government to deal with such issues. Thus, if National in opposition fails to significantly rethink its policies and priorities so it can deliver real alternatives at the 2020 or 2023 election, then it could well lose the traditional support of business leaders.

Listen to the strategists, not the foot-draggers

The same major shift in sentiment is at work in the primary sector, particularly on climate change but also on the push to break free from commodities through creating higher value, better differentiated products.

Clearly the forestry sector is fed up with being screwed by National’s suppression of the carbon price during its most recent three terms in office, to the detriment of new plantings.

But elsewhere too there is a growing sense that addressing climate change will bring opportunities to farm with a lower environmental impact while improving the quality of products, the connection with consumers and the profitability of operations.

In this column in August I described this reinvention that is underway in global foods systems; and in this column in September I wrote about the abundant opportunities for our farmers in the transition to a low emissions economy.

Landcorp is the most advanced in such strategies among individual farming businesses; and Beef+Lamb is the most advanced among farming sector organisations.

In contrast, the dairy sector is much further behind. Most worryingly of all Fonterra, whose suppliers’ farms account for almost one-quarter of our greenhouse gas emissions, has set a goal of no net increase in methane emissions by 2030. If that’s all it achieves, then we have no hope of meeting our Paris climate commitment.

Thus, the greatest danger of all over the next few weeks is that National will listen to the foot-draggers in farming and walk away from cross-party support for ambitious climate legislation. If it did, it would cause itself considerable long-term political damage.

Conversely, if it wants a broad-based political future, it needs to show it understands where our best economic and environmental opportunities are as a nation. To that end, it should listen to business climate leaders from across all sectors but most particularly from the primary sector.

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