Friday, September 22, 2023

Climate Change: Ignoring our biggest problem

Its that time in the election season where the status quo parties are busy accusing each other of having fiscal holes in a desperate effort to appear more "responsible" (but not, you understand, by promising to tax wealth or land to give the government the revenue it needs to do what we want it to). Meanwhile, Treasury's pre-election fiscal update included an even bigger fiscal hole, by completely ignoring the cost of failing to meet our climate targets:

The gulf was highlighted in the Pre-election Economic and Fiscal Update (PREFU) - Treasury's official word on the state of the government's books - which explicitly excluded the cost of meeting New Zealand's international climate target under the Paris Agreement.


This is where the gap in the books comes in. Treasury had previously put the cost of buying these credits from overseas - and an estimated 100 million tonnes of them will be needed, at last count - at between $3.3b and more than $23b between now and 2030. Even at the lower end of projections, it could work out at around $500 million a year.

And to put that in context, $500 million a year is a budget headline policy. Its basicly the entire police or environment budgets. It is therefore quite obviously significant to the government's books. But instead, they're choosing to ignore it - and this has consequences. Most obviously, policy is not tested on whether it reduces or increases that liability. Sure, there's climate implications of policy assessment, but that is a) frequently ignored; and b) not in the language Treasury understands: dollars on the books. And the net result is that emissions reduction is seen purely as a cost, rather than as a benefit, and that we keep doing stupid stuff like building roads or continuing to use fossil fuels because the costs are hidden. And it means politicians see ETS revenue as free money which can be spent on other things or looted and distributed to your rich donors as tax cuts, rather than as money which we need to pay for reducing emissions or covering the cost of not doing so - because that link is not made in the language they understand.

Climate change is the biggest issue we are facing as a country and as a species. "How are you going to reduce emissions enough to meet our Paris target" is the biggest question politicians should be answering. Ideally, they'd recognise that question as vital in and of itself, and we shouldn't have to disguise it behind money to get them to pay attention. But money is the language politicians speak (policy being about the allocation of resources), so excluding our biggest problem from that language has consequences. And those consequences are going to be disastrous.