Tuesday, April 14, 2020

Climate Change: The need for a green recovery

This morning, Treasury released some truly terrifying scenarios for the economic impact of the pandemic - a major recession and 13.5% unemployment in the best case. The government is going to try and counteract that and get people back into work by funding infrastructure - essentially, throwing money at the problem, which is good. But as The Spinoff noted, "by definition, today’s shovel ready project is yesterday’s idea". There's a danger that infrastructure will be old, dirty, and lock in carbon emissions rather than reducing them. And that danger has been highlighted by the Climate Change Commission, which has written to the government urging that it apply a climate change lens and not fund further pollution:

The Climate Change Commission – the expert panel tasked with getting New Zealand carbon neutral – has written to the government asking it to apply a "climate change lens" to the post-Covid-19 spend-up.

In a letter to Climate Change Minister James Shaw, the commission warned that locking New Zealand into a high-emissions future "will only compound today's crisis with a future one".

"An economic stimulus package can either speed up or stall our progress on climate change," said the letter.

The commission is worried about boosting emissions, but also concerned that the wrong investments will make people and costly infrastructure more exposed to damage from climate change.

If this had happened a year later, the government would effectively be obligated to do this anyway (or rather, would see its rebuild decisions delayed by judicial review, making it simply easier to be sensible). But because the Commission hasn't completed its initial budgets and reduction plans yet, the requirements are very weak: the government really only has to consider the 2050 net-zero target. Though given that infrastructure tends to be long-lasting (the Huntly power station has been with us for 40 years already), that should provide some leverage.

The Commission is also concerned that the pandemic could be used as an excuse to stall reform of the ETS and remove pollution subsidies. Farmers, National, and NZ First are already being vocal about this, but it would mean basicly surrendering any pretence that we ever intend to reduce emissions. And as with the lockdown, early action matters hugely. The quicker we get a proper price signal into the economy, the better (and easier) or emissions-reduction pathway. Hopefully, our politicians will accept that, rather than continuing to fuck up the future.