Loud, long and legal. That is one business encapsulation of what needs to follow the carbon tax (R.I.P.). If so, business could usefully get in at the design phase.
The point for business to grasp, especially in grumpy Auckland, is that international politics and international business are embedding climate change as a policy threat. Something will fill the carbon tax hole.
Business New Zealand CEO Phil O’Reilly says business’s interest is to get certain and long-lived policy. Some add “clarity”. So, O’Reilly says, it is time business and politicians got out of the trenches they have dug, particularly during Labour’s six years.
The point for the government to grasp is that if it expects business to cooperate, it must identify and focus on opportunities instead of moralising about sacrifice — that is, focus less on mitigation and more on adaptation, to put it in the terms of one theme at last week’s two climate change conferences.
“The opportunity is there to create consensus,” O’Reilly told the smaller of the conferences, organised by the Institute of International Affairs (IIA). “You want to get it right on a multiparty basis and in a depoliticised way.”
The danger for business that O’Reilly sees is that “the government jumps into the policy gap and fills it with a new idea and that creates another set of trenches”.
O’Reilly is no climate change wet. He is responding to the emergence in parts of the world of a price on and market in carbon. At the larger, Victoria University, conference Kirsty Hamilton quoted Goldman Sachs as saying it has money to put into carbon markets and they are not happening fast enough.
In short, denial won’t do. Too many people in too many high political places round the world and in too many international companies accept that the planet is getting warmer, whatever the lingering arguments about the science. And there is a growing sense also among the public here that something is afoot, even if few have much idea what it entails or what to do about it.
Except in small pockets, the argument now is about how much warming there will be, how fast it will happen and the likely consequences. Some scenarios at the Victoria conference resembled science fiction — marvellously scarifying (like the avian flu fright) and great movie material but beyond comprehension or reasonable response. Equally, some of the sceptics now sound polemical.
National’s Nick Smith splits hairs: the government treats the pronouncements of the international panel of scientists which plots global warming as predictions when actually they are scenarios. But with the bottom end scenario now firming at 2 degrees over the next half-century or so, that is getting close to prediction.
So one of O’Reilly’s first tasks is to get National to take consensus seriously. On-again-off-again policy is no backdrop for sensible business planning.
He has been quietly exploring with officials and ministers the basis for business input into at least some of the government review’s 15 work streams. He aims to get some realities recognised and a broad-based approach rather than the narrow one the carbon tax morphed into.
He particularly wants politicians not to underestimate the power of voluntarism.
Translated into bottom-line values, that suggests self-interest might go much farther than sceptical or authoritarian ministers have accepted.
Take, for example, cost of capital. A carbon disclosure ruler is about to be run over New Zealand firms.
Second, a reputation for dragging the chain might turn climate-change-sensitised consumers off our exports in some markets. Fonterra , for example, takes climate change seriously, counsel Kerry Marshall told the IIA conference.
Third, says Peter Neilson of the Business Council for Sustainable Development, listing a number of business-friendly possibilities for government and business action, “there is going to be a carbon price”. So it makes sense to get ahead of the game or at least anticipate it in business plans.
How? Elayne Grace of insurer IAG told the Victoria conference firms could, by rethinking the way they do things, reduce costs and risk and encourage creativity, an important ingredient in high performance.
Insurers, of course, have a vested interest in talking up climate change: they want to reduce their own risk from extreme weather events. And fund managers have an interest in differentiating products: climate change and carbon markets fit that.
For firms making and doing things on the ground opportunities are less obvious. Moreover, confidence surveys of businesses here portray a hang-dog lot, evidenced in a profound negativity about the state of the economy throughout the past five boom years.
That augurs ill for consensus seekers like O’Reilly.
Moreover, his Auckland constituent, the Employers and Manufacturers Association (Northern), went feral against Labour last election (though Prime Minister Helen Clark and CEO Alisdair Thompson have been building small bridges).
Federated Farmers went feral against Labour last year, too — still is feral now, over the tiny issue of dog chipping (though Jim Anderton’s relentless positivity and open door might be starting to detox that standoff).
The Business Roundtable remains sceptical.
Ultimately it comes down to self-interest. Will enough businesses see “loud, long and legal” as in their strategic interest and buy into O’Reilly’s consensus mission or will too many hope climate change will biodegrade as a policy fixation, find it doesn’t and labour under variable Beehive policies?
The next six months might be critical.