Tuesday, October 14, 2008

Short-term thinking

One of the concessions the Greens won in exchange for their supporting the Emissions Trading Scheme was the establishment of a $1 billion household fund to pay for upgrading the energy efficiency of New Zealand's housing stock. National wants to get rid of it. It's a perfect example of their short-term, loot the state policies, and one with a real cost. Quite apart from the emissions reductions it would produce (more significant than they first appear, since the marginal generator in New Zealand is thermal), it will also save lives.

A 2006 study showed that cold weather kills 1600 people a year, and that many of these deaths could be avoided if people had properly insulated homes. But in addition to the deaths, there are also far more illnesses, which in addition to making people miserable, cost us all money in terms of days off work and school, GP visits and hospital admissions. A 2007 study [PDF] in the British Medical Journal showed that installing insulation led to better self-reported health, fewer GP visits, and a possible downward trend in hospital admissions. Another study by the same group assessed the NPV of installing insulation, and found that the benefits of insulation were at least twice the cost [DOC], and that it was worth it for the health benefits alone. This is very low-hanging fruit, and a perfect example of a "no regrets" option - it actually saves us money to do it. But it costs money up front to get those benefits, and National would rather give that money to rich people than invest in the lives and health of ordinary New Zealanders.