Climate change: foreign and trade policy too

The National party wants the emissions trading bill passed but is voting against it. Does that make sense to you?

The government is ramming through the bill with late changes so numerous it is near-impossible to work out what it actually says and with minimal guide for those who try. We can be sure it is riddled with errors. Does that make sense to you?

This is major law, aimed at a major change, over time, in the way we live. National says it should be thought through more carefully. Ministers say climate change has been debated near to death for a decade and it’s time for finality.

Both have a point.

Labour ministers lay part of the blame for the messy, last-minute scramble on attacks on their early efforts to translate the Kyoto commitment into law and action — including the larrikin campaign against the “fart tax”, which was neither a tax nor about farts.

Indifference, often verging on obtuseness, was the most common reaction to climate change initiatives in the early 2000s, including attempts to interest small businesses in energy efficiencies which would cut their costs. Those who took an interest often divided irreconcilably between zealots wanting fast, drastic action and short-focus, self-interested firms, farms and their lobbies.

The result was hesitant and tentative policy.

Only with Al Gore’s excitable “truths” and the pernicious European middle-class “food miles” movement did a window open for ministers to climb through. Even the National party (and its current leader) somersaulted from denial of climate change to backing an all-sectors, all-gases trading scheme.

But no sooner did ministers start to climb through the window than a chorus swelled of “not me, not now, not this way”. Farmers, who have most to lose if supermarkets “carbon-profile” their products unfavourably, were the loudest. World giant aluminium maker Rio Tinto threatened to shut Tiwai Point, even though it is one of its most efficient plants.

The government might have avoided this trap had it grasped that it was in a new century and from 2000 tried a new-century way of tackling an issue of major national importance — to build a broad consensus the way Scandinavian countries do, involving the peak interest groups and political parties in multi-year round-the-table give-and-take. A National approach was rebuffed (for good reason, ministers say).

Only very late, when the carbon tax had been destroyed and the emissions trading bill appeared, did ministers hand-pick a “leadership forum”. It was too little, too late and excluded too many. Some useful research has been done but the forum’s influence has been limited, so the buy-in, particularly from business, has likewise been limited.

Now, also late, Business New Zealand has pulled together major firms with the Institute of Economic Research to develop what chief executive Phil O’Reilly, a tart critic of the current bill, described to National’s Bluegreens’ conference on Saturday as a “sustainability work programme to put this in a sensible whole”. He sees “a lot of upside in being first in some things that matter for us”.

O’Reilly reckons few significant business players now don’t accept that there is an issue and that businesses must respond. A Business New Zealand-CarboNZero project for small-to-medium enterprises was three times oversubscribed.

O”Reilly told the Bluegreens that for business climate change is a consumer issue: first, “consumers are making a change” and business needs to respond — this economy is “uniquely vulnerable to not doing enough”; second, in New Zealand “consumers are responsible for the growth in emissions, not business”.

Nevertheless, “it is business that will drive this forward. The government needs to engage with business sensibly, proactively and positively.”

O’Reilly says big exporters here are “very emissions-efficient” and so should be allowed to “continue to grow”. The current bill allows that only in narrow circumstances.

This makes sense in a planetary frame if a firm or farm here is cleaner than one which might expand in its place in a dirtier country. But it would expand total emissions here — costing taxpayers more — and that increase might be what foreigners focus on when assessing whether to buy our products and visit, whether to impose countervailing tariffs and whether to take seriously our negotiators trying to get concessions in the negotiations for a post-2012 international regime.

Put into this frame John Key’s vote against the bill (even while proposing to keep, though amend, it, roughly along O’Reilly lines). Key told the Bluegreens it is important this country “marries its economic and environmental policies”. But if foreigners see his bill stance as obdurate, he may, if Prime Minister, find it harder, at least initially, to make New Zealand’s special case.

The point is this: climate change policy is foreign and trade policy, as well as economic and environment policy. Key seems not to get that yet.