Draining the swamp
While governments set themselves ambitious carbon-cutting targets, it’s going to take a lot more than talk to actually achieve them.
In Brief
- Economists say that climate change can be tackled through renewable energy subsidies, investment in green infrastructure and a carbon tax.
- The Australian and New Zealand governments have both committed to achieve net-zero emissions by 2050, but commentators say that little-to-no progress is being made.
- Beyond a technological solution for livestock emissions and the huge costs of going green, many of the barriers lie in the politics of climate change – from NIMBYism to sectoral interests.
Most summer holidays I hack my way round the Takaka golf links. Sometimes I even break 100.
It’s a nine-hole course.
Even sadder, the course is eroding. Rising seas and wilder tides are eating away the beachfront fairways. It’s getting easier every year to slice your drive off the second tee into Golden Bay.
Earlier this year, coming home from those summer holidays, my wife and I had to bale up for the night: supposedly once-in-a-century flooding made it too dangerous to drive. When we got home to Auckland, we were lucky: our place was OK, but all around us farms were underwater, stock drowned, roads closed. Four weeks later Cyclone Gabrielle did it all again.
You’ll have your own moments when climate change became real: many will remember, for example, coming out of air-conditioned Sydney Airport into 40°C heat and smoke from the 2020 Black Summer bushfires.
A market solution
The good news is that we know in principle how we might tackle the problem. At this year’s New Zealand economists’ shindig, for example, Aussie economics professor Warwick McKibbin showed us global modelling he’d done for the International Monetary Fund (IMF). It featured a three-point plan: subsidies for renewable energy like solar and wind, a program of public investment in green infrastructure with ongoing maintenance to keep it in good nick, and a carbon tax which rises by a stiffish 7% a year and which is partly returned to poorer households to help them pay the bills.
The end result is that you can indeed have a globe that won’t warm up to dangerous levels, while maintaining living standards. The spending on cleaner infrastructure offsets the hit to output from higher tax, while the new greener gear and the progressively stronger bite of the carbon tax deal to emissions. Greeny types tend to belittle market-based tools like carbon taxes or emission trading schemes (‘a licence to pollute’), but they shouldn’t: market incentives tend to unearth the most efficient way to deal with climate change and make a society’s resources go further.
Cheaper green power
It’s also good news that the costs of green energy are falling all the time. The latest (July 2023) CSIRO (Commonwealth Scientific and Industrial Research Organisation) GenCost Survey, for example, calculated the likely cost of different power sources in 2030. There are high and low estimates for each source, but the clear evidence is that solar and wind power are now the cheapest energy options, as shown in the first graph.
Solar, for example, is far more efficient than it was, thanks to technological innovation – the panels convert more of the sunlight into energy – while costs of production have plummeted because of the virtuous cycle of economies of scale. They get cheaper to make, people buy even more as prices fall, costs drop even lower. In the US, the price of a kilowatt of solar power has dropped by 94% in three decades. The end result is that we can both green the planet and save money.
Government (in)action
So it’s good news, on the face of it, that both the Australian and New Zealand governments say they are getting more serious about climate-change policy. In June last year, Australia proposed a tougher limit for greenhouse gas (GHG) emissions – 43% below 2005 levels by 2030 – and earlier (November 2021) New Zealand had also upped its game, committing to GHG emissions 50% below 2005 levels.
Both countries aim to have net-zero emissions by 2050, where whatever gross emissions are left are offset either by buying Emissions Trading Scheme credits or by running carbon-absorbing sinks like forests.
But, as graph two shows, there would have to be a big change to emission patterns in just seven years for those targets to be met. There’s been some progress in Australia – mostly down to changing land use patterns such as greater forestry and, to some degree, cleaner electricity generation – but little or none in New Zealand.
Third-party observers are not impressed. The researchers who compile the Climate Action Tracker reports say that “It is still possible for Australia to get emissions onto a pathway to limit global warming to 1.5°C this century, but urgent action is required. To be 1.5°C compatible, Australia would need to reverse its current federal policy direction.”
They are also critical of New Zealand: “To its credit New Zealand has a target of net-zero emissions by 2050 enshrined in law, under the Zero Carbon Act, but its short term policies cannot yet keep up with this ambition.”
Poo, pennies and politics
Why isn’t more progress being made?
Some of it is technical: no-one has yet got a good solution for livestock emissions (agriculture makes up a bit over half of New Zealand’s emissions and a bit under a fifth of Australia’s). Some of it is financial: one recent report estimates that decarbonising Australian heavy industry alone will cost A$20 billion a year for the next 30 years, and another puts the total cost of getting to net zero by 2050 at A$5 trillion.
In addition, the politics of climate policy remain problematic. Decarbonisation throws up winners and losers, both internationally and domestically. In principle, there should be a bargain doable where there are enough overall benefits on the table to compensate the losers, but that’s easier said than done in Canberra or Wellington and it’s often a temptation to play to sectoral interests.
And even when you’d think people would be falling over themselves to facilitate green infrastructure, NIMBYism (not in my backyard) and the resource consent system get in the way. New Australian electricity transmission lines or new wind farms in New Zealand are hard to shepherd through the obstacles. Yes, people have interests they are entitled to protect, but some days it’s tempting to follow the French planner who was asked how France managed to get its grands projets away: “When we drain the swamp, we don’t consult the frogs.”
Blockers and delayers can be beaten. In May, Lawyers for Climate Action NZ challenged the government’s plan to keep the carbon price down by issuing a generous quantity of extra Emission Trading Scheme credits. That jeopardised progress towards lower emissions but helpfully kept higher carbon prices out of household budgets when family finances are pressured (Australia’s recent price controls on gas scratched the same political itch). They won, and the New Zealand Government had to revert to a lower and more climate-change consistent allocation.
Maybe we need more professional ginger groups. Accountants for Climate Action, anyone?