From home insulation to fast electric trains: Where Government could aim its spending

Warm up the rest of NZ

There’s healthy disagreement between various groups about the scope and priorities of the Government’s spend-up.

One project with broad support is improving housing.

The Warm Up New Zealand programme has put insulation and/or heat pumps in hundreds of thousands of houses, but up to 40 per cent of homes remain cold and damp, the Green Building Council says.

Burrell says retrofitting the remaining homes is a no-brainer. ‘‘It’s simple, it generates jobs, it’s low risk, and it will have a positive impact on emissions.’’

Environmental organisations such as the Environmental Defence Society agree, citing the energy savings from higher-standard homes. Commercial buildings should be spruced up too, says Andrew Eagles, chief executive of the Green Building Council, since they’re enormous users of energy.

‘‘A canny government investment of energy grants paid to building owners in full could slash energy use by upgrading insulation, replacing all lightbulbs with low-energy LEDs, and installing energy-efficient heating and ventilation,’’ he says.

‘‘Retrofitting just 1200 of Aotearoa’s largest commercial buildings to make them zero energy would reap energy savings equal to the annual electricity generated by all of the country’s wind turbines, saving businesses millions of dollars.’’ Eagles also supports tightening the building code for new buildings, to avoid costly retrofitting later.

More EVS – but how?

A feebate scheme was dropped earlier this year when it couldn’t get past Government coalition partner NZ First. The scheme would have imposed a fee of up to $3000 on the cost of the least-efficient, New Zealand-new vehicles at the border, and made the climate-friendliest cars up to $8000 cheaper.

The cost of buying used vehicles that are already in New Zealand wouldn’t have been affected. The Green Party remains supportive – and Prime Minister Jacinda Ardern has said the proposal’s not dead yet.

However, National’s Scott Simpson prefers cheaper nudges towards uptake of electric vehicles (EVs): ‘‘The feebate model is not a great way to incentivise uptake. There are obvious policies they could pick up, like extending the free roaduser rates [and] . . . inexpensive things like allowing them to use bus lanes and T2 lanes.’’

Burrell says a major missing part of the puzzle is a nationwide network of charging stations. ‘‘The cost of light freight vehicles is coming down quickly, so that will fix itself, but what won’t fix itself is charging infrastructure – that’s where the government needs to talk to the private sector.

‘‘It might be that the private sector will invest in charging stations, for example, but don’t want this undermined by government investments.’’

Work with business

A charging network is just one area where Burrell says the private sector could invest with the Government.

He reckons businesses have a serious adjustment coming, because the Government looks set to hold sway over billions of dollars in additional spending. ‘‘Since the 1980s, we’ve been very much a light-touch economy, and we are about to become a heavytouch economy at a scale we haven’t seen since the 1930s,’’ he says.

It’s the kind of situation where mistakes could be made, and have been, as a quick glance through recent history reveals.

Robert Muldoon’s spend-up during his time as prime minister in the 1970s and 80s – dubbed Think Big – gave New Zealand both enduring benefits (the renewable energy-pumping Clyde Dam) and costly dead ends (a defunct synthetic fuels plant).

‘‘The Government can avoid the worst excesses of the Think Big period, or we could have a repeat,’’ says Burrell. He wants it to look for climate-friendly projects that the private sector is already willing to invest in, and give them a boost. ‘‘It might be as simple as giving a tax write-off if you put in an EV charging station, or incentivising companies to take a risk by making the path forward clear.’’

Give natural areas a tidy-up

EDS chief executive Gary Taylor says the Government could get a huge workforce out planting and caring for public land.

By protecting native forests from nibbling pests and invaders, workers would help safeguard huge natural carbon stocks, and support green tourism in the future, several ecologists and green groups suggested this week.

It might also help tourism – assuming tourism returns. ‘‘Large numbers of workers could assist the Department of Conservation to strengthen our green infrastructure by creating new tracks and facilities, tackling pest and weed infestations . . . replanting erosion-prone land in native forests and helping clean up old rubbish tips in danger from sea-level rise,’’ Taylor says.

Forest & Bird came up with a comprehensive list of ideas – including redeploying tourism and forestry workers in the regions to help with track repairs and upgrades, fencing, and maintenance on conservation land. It makes sense to do it now, while tourist numbers are low, says the group.

Such spending would help boost jobs and school attendance in the regions and keep some local communities viable, Forest & Bird says. The same could be said of dune restoration at beaches and looking after streams and rivers by fencing and planting.

Fix the ETS, fast

In 2009, the Emissions Trading Scheme (ETS) was weakened in response to the global financial crisis.

This time, NZ Initiative chief economist Eric Crampton says, the Government needs to push on quickly with strengthening the ETS.

The Government was navigating measures to strengthen the ETS when Covid-19 happened. Finishing that process soon is crucial, he says.

The shape of the ETS will help determine the future price of carbon emissions – and that will help determine infrastructure spending, Crampton says. ‘‘If we know the ETS prices will be tripling or quadrupling over the next 10 years, say, that would let forecasters start making projections about transport demand and we will know what to invest in, based on expected price of petrol and other things.’’

He says the Climate Change Commission’s modelling will be important. The commission acknowledged recently that Covid-19 threw its modellers a curveball, but it’s working to prepare projections before it makes emissions-cutting recommendations to the Government next year.