The ETS's lesson for consensus-builders

Sue Bradford is leaving the Greens’ caucus next month. She lost a majority vote. That is not very Green.

Bradford is a battler. She has added a dimension of tough social activism to the Greens which they will not readily replicate. Not many MPs could have done her section 59 bill.

But Metiria Turei beat her in a majority vote to be co-leader. The Greens went for a change of generation. Bradford is baby-boomer 57. Turei is generation-x 39. Post-Bradford, the Greens will be less social-activist and more small-g green.

Greens prefer consensus to majority and sometimes go to great lengths. At the 1994 conference, deciding whether to stay in the Alliance, they spent a whole weekend seeking consensus: the pressure on dissenters became electrifyingly intense. It was a sort of tyranny of consensus. (In the end they gave up and voted yes, 85-5.)

Consensus is not the usual way of our law and politics. Lawyers go to battle, overstating their cases, and a judge arbitrates if reason doesn’t intervene. The big political issues are decided the same way, even under MMP. We like our public life adversarial.

This works after a fashion. If a government stays long enough in office, its policies usually become the norm. A default consensus of habit builds around that norm. Expect that for Bradford’s section 59 repeal.

Often a policy goes through one or two modifications as governments alternate before default consensus forms. For example, labour law probably has another round to go after this government.

This is party democracy at work. But it can be damagingly uncertain, deterring personal and capital investment.

Climate change is in that box. Labour scraped a bare majority in 2008 for its emissions trading scheme (ETS). National has a bare majority for its ETS.

That is despite Nick Smith’s declared desire for a bipartisan consensus with Labour and despite business’s desire for policy certainty. As Smith’s bill stands now, it remains possible a post-2011 Parliament could revise the ETS yet again, even if National remains the lead party in the government.

That is because in a second term National is most unlikely to have two majorities, as now, when it can pick ACT to reject Maori seats in super-Auckland and the Maori party for the ETS.

In a second term John Key would very likely need both for a majority. If the Maori party were to back a Labour-Green revision — and, remember, it issued a minority report to the select committee ETS study and seems so far not to have got much in return for its backing Smith’s bill — the game would be on again.

That would not be fun for businesses. Their interest lies in Labour and National sinking differences and settling the rules. Witness the lack of forestry investment during National’s long-drawn-out revision this year. Will Smith get new planting of 50,000 hectares a year to meet his 2020 emissions target?

Smith’s and Key’s abrupt gazumping of talks with Labour with their Maori party deal will, unless remedied, keep the uncertainty alive. This was old-fashioned hardball politics. Key is not just a nice guy: there is cold steel under the smile.

The problem for Labour was and is that Smith’s ETS is the ETS you have when you are not having an ETS: no cap on emissions (so no “cap” in the “cap-and-trade”), a cap on price (so no “trade”, just tickle the taxpayer) and languorous phasedowns of gross emissions which pushes out hard decisions (if needed) into a misty future.

There are strong arguments for taking this line at this stage: agriculture is not yet in any other scheme and is generally greener here than most other places; we have huge tracts we can plant in trees to offset emissions; other countries are protecting their trade-exposed sectors and will likely cheat on whatever is agreed in the Copenhagen process; a too-pure New Zealand stands to lose economic output for no, or little, global environmental gain and maybe even global environmental loss.

But these arguments undermine Key’s butter-wouldn’t-melt-in-his-mouth protest in New York that New Zealand will be a fast follower. Even though the ETS is the first to include “all sectors, all gases”, its other features are of the slow-following variety.

Labour is not for slow-following. And there are strong arguments on its side: Horticulture New Zealand’s line that “retailers are the new regulators” in their drive for environment-friendly branding; the value of a strong country brand for product branding; opportunities for “green growth”; almost certain emissions growth under Smith’s ETS; Smith’s big bill for taxpayers.

So even if Labour and National get back talking, there are now big obstacles to bipartisan consensus, without significant concessions by National.

Who cares? The bill will pass. But that is after 15 years of to-and-fro inconclusiveness and maybe more to-and-fro to come.

The lesson is that consensus is unlikely for other economically critical issues, such as water. Majority rules. As Bradford found.