Climate Change: The cost of inaction

Treasury and the Ministry for the Environment have produced a Climate Economic and Fiscal Assessment 2023, with an estimate of the costs of climate change. Its already wildly outdated - insurance claims for the Auckland floods and Cyclone Gabrielle have topped $2.47 billion, completely burying their estimates of weather costs. But it also includes an updated estimate of the cost of failing to meet our Paris NDC of a 50% cut by 2030. And its staggering:

New Zealand could face a bill of $24 billion in the years leading up to 2030 in order to meet its international climate change targets, according to a Government report.

That scenario is based on New Zealand not reducing its current greenhouse gas emissions trajectory, and a high international carbon price for offsetting any emissions above the country’s target - essentially paying other countries to account for the excess pollution.

The report notes the high uncertainty around international markets, with a much lower carbon price reducing the bill to just over $3b.

But a climate change expert says with competition for carbon credits likely to only increase, it is unlikely the price will stay low, and while domestic reductions might appear expensive in the short term, they might later be a “pretty good deal”.

As the article notes, there are strong reasons to think the price will be higher rather than lower (not least because developing countries have little incentive to accept low prices when they can get higher ones). So we need to cut emissions harder and faster to avoid paying those costs.

And on that point, we should remember that any failure to meet our Paris target can be laid at the feet of one noisy, greedy, selfish group: farmers. Less than 5% of the population, they produce 50% of our emissions, and are refusing to reduce them. The rest of us are doing the work, paying for every kilo of carbon we emit, decarbonising transport and electricity and industry, and meanwhile there's this tiny bunch of arseholes driving around in dirty, inefficient utes, their vast herds of cows burping out methane and shitting in the rivers, refusing to do anything (worse: undermining what the rest of us are trying to do). They say that its because its "too hard", but its not too hard to just not replace cows as they are sent to the works, or to let inefficient sheep and beef farms be turned into forests. They simply don't want to change what they're doing, or accept lower profits. And they've convinced (or rather, bullied) the government into letting them get away with it, and covering the costs - effectively letting them privatise the profits of their pollution, while socialising the losses.

Their refusal is on-track to cost us $24 billion. Its only fair that they should be the ones who pay for it. And if they won't do it through the ETS, then we should make them do it with a special emissions levy on rural land.