Coalition shows green credentials
OPINION: After stumbling through March, the Government has grabbed back the policy agenda in April, spitting out a range of new policies that are consistent with its promise of a ‘‘transformative’’ agenda, and most of which involve environment and sustainability initiatives.
The grandaddy announcement was the decision to end new offshore oil and exploration permits.
But whether it’s the switch from funding motorways to light rail, the formal abandonment of government support for large-scale irrigation, or the appointment of the interim climate change committee, the green bent in that agenda is to the fore.
Just how happy Labour’s formal coalition partner, NZ First, is about this has been the subject of much pop psychological interpretation regarding the look on Shane Jones’ face at the oil and gas announcement.
But his defence of the Government’s position and his willing commitment of the Provincial Growth Fund to projects intended to aid the ‘‘just transition’’ to a low-carbon economy look genuine enough.
At the very least, he’s playing the Cabinet collective responsibility card with a straight bat despite personally being a fan of hydrocarbon extraction over the years. Unlike Prime Minister Jacinda Ardern, whose personal commitment to bold action on climate change has led her to draw a line under one of the country’s most valuable industries, Jones has traditionally taken a dim view of big gestures that cost jobs.
However, the die is cast now, and the reality remains that interest in offshore oil and gas exploration had dwindled dramatically in the past couple of years. Expect more of a scrap when it comes to ending exploration onshore, especially if Woodward Partners energy analyst John Kidd is right and a downgrade in the extent of existing oil and gas reserves is imminent.
If that happens, the belief that there is at least 10 years of natural gas still available to meet the needs of the biggest industrial gas users – including Methanex, Fonterra, New Zealand Steel, Balance, Ravensdown, and the electricity generators who fire up gas-fired power stations when wind or water are short – may prove overconfident.
That said, ministers are right that sending this signal about the future availability of domestically sourced fossil fuels gives industry plenty of notice to adjust. Avoiding Rogernomics-style reform upheaval is politically mature.
However, it will be a hollow sort of victory if the adjustment comes in the form of greater use of coal for industrial heat or resurrection of plans to import natural gas.
As many critics and some supporters of the decision have noted, stopping exploration for oil and gas won’t of itself stop a single molecule of carbon dioxide from being emitted.
The mechanism for achieving that remains the emissions trading scheme. Consequently, this week’s announcement of the interim climate change committee, which will come up with recommendations on bringing agriculture into the scheme and achieving 100 per cent renewable electricity by 2035, is far more significant in practical terms than the more politically dramatic oil and gas announcements.
The latter aim should not be too difficult to achieve. With electricity already 85 per cent renewable and with stacks of wind and geothermal power stations holding resource consents but not yet built, the road to more renewable generation looks wellpaved.
More challenging will be how to bring agricultural greenhouse gases – nitrous oxide and methane – into the scheme. The coalition agreement envisages just 5 per cent of agricultural emissions being covered at first.
That should be achievable without economic upheaval, and perhaps even without political upheaval if the ‘‘point of obligation’’ for the carbon cost is the gate of the processing factory rather than at every individual farmer’s front gate.
The bigger question is whether methane can reasonably be included when there is no technological solution to cows and sheep burping.
A betting person might put money on a plan that brings nitrous oxide into the emissions trading scheme immediately, but holds off on methane while research into its reduction bears fruit.
Avoiding Rogernomics-style reform upheaval is politically mature.