It’s deja vu all over again: NZ consultation on climate target set up to be a farce

NZemissionsconsult.jpgAt the end of last week, with the deadline1 for submissions on a post-2020 target for New Zealand emissions rapidly approaching, the Ministry for the Environment released a second set of economic cost estimates for various emissions targets. These cost estimates are substantially lower, the Ministry admits, than the costs in the consultation document issued by the MfE on May 7th. As it happens, neither the Infometrics modelling used in the consultation document or the newly-published Landcare Research is terribly helpful when considering policy options, as I shall discuss later, but for the time being consider the usefulness of a “consultation” process where the following is true:

  • Announce a four week consultation period on May 7, starting then, to conclude four weeks later.
  • Publish a consultation document that plays up the costs of action and plays down the costs of inaction — calculated by Treasury to be up to $52bn.
  • Conduct a rushed series of consultation meetings around the country to which no ministers front up.
  • Release the economic modelling relied on for the cost estimates in the consultation document 10 days after the process begins, well after the consultation meetings have started.
  • Release a second economic modelling report showing costs to be less than the original document presents just over a week before submissions close.

If that’s not a prescription for a Mickey Mouse consultation process that’s designed to pay only lip service to public concern, a disgraceful political sham that should have officials — who are expected to be resolutely non-partisan and to serve the public interest — hanging their heads in shame, then I’m a maker of fine Low Country cheeses.

But it gets worse. An examination of the economic modelling commissioned by the MfE shows that the whole process was set up to exaggerate the costs of cutting New Zealand’s emissions.

I am not an economist, and I am most certainly not an economic modeller, so I will not comment on the accuracy or predictive skill of economic models, except to note that they are 1.6 million kilometres2 removed from climate modelling. I always find it most instructive to look at the assumptions fed into economic models, and to assume that the the results the models generate are reasonable within their own limits. So what are the assumptions baked into the Infometrics modelling MfE relies on for its costs projections?

These are what the Infometrics report presents as its “overarching assumptions”:

Given time and budget constraints, the scope of this research does not include any analysis of:

  1. The net impacts of NewZealand’s greenhouse gas emissions on climate change and what the economic and social effects of a changing climate might be.
  2. Non-market policies to reduce emissions, such as restrictions on fossil-fuel generation of electricity and biofuels obligations.
  3. What action consumers or governments in other countries might take against New Zealand if it was perceived that New Zealand was not doing enough to reduce emissions.
  4. Likely trends in global carbon prices.

There are a couple of extensions to that list: the Infometrics modelling excludes any domestic pricing of agricultural emissions over the next 15 years, but assumes that they will be included in international emissions accounting. It also ignores — ignores! — what could be achieved by incentivising forestry planting:

Uncertainty in accounting settings makes it difficult to quantify the effect of forestry and land-use emissions and removals for the purpose of the modelling. To avoid distorting the results, mitigation through forestry and land use has not been quantified or included in modelling estimates presented in this report.

Let’s summarise. This is what the economists at Infometrics (and Landcare Research – their assumptions are not too different) were asked to test:

  • we will ignore the likely costs to society and the economy of a changing climate
  • we will ignore any non-market tool for achieving emissions reductions by regulation
  • we will ignore NZ’s international exposure to climate risk
  • we will ignore anything that agriculture can do to reduce emissions, and assume that the rest of the economy will be happy to subsidise farming
  • we will ignore anything that our forestry industry can do to plant trees and remove carbon from the atmosphere
  • and we will assume that we can only meet our emissions obligations by buying overseas emissions units.

In other words: if we assume that we proceed for the next 15 years with a blindfold over our eyes and our arms tied behind our back, we find that action to cut emissions will be expensive. Who’d have thought it? What a surprise…

That’s bad enough, but there’s more that the MfE’s economic consultants refuse to price. The consultation document points out that there opportunities to be had in a transition to a low carbon economy, and suggests that electric vehicles are an example of beneficial change that’s already happening. But there are many more to be found in low carbon technology development, both biological and physical. NZ is already recognised as a good platform for testing software and services — and that could be true for more than iPhone apps or accountancy services.

What’s worse is that every year we continue down a path that ignores the inevitability of a transition to a net-zero carbon economy, we make action when it finally comes all the more expensive. There is a very real price to be paid for being locked into a high-carbon economy. Tim Groser and John Key are — unwittingly, one hopes — busy turning a drama into a crisis. And it won’t be them that pays the price.

The current government should not be allowed to play silly games with all our futures. They are embarked on an economic and strategic governance failure of epic proportions. I suspect that nothing anyone says in this sham of a consultation will be listened to: but at least what we do say will stand in the public record. Not everyone sank the ship. Not everyone turned a blind eye. Not in my name, Tim Groser.

[Headline, of course, and also Crosby, Stills, Nash & Young, though given where we’re heading Wooden Ships is probably more appropriate.]

  1. Submissions close at 5.00pm on Wednesday 3 June 2015. []
  2. A million miles. []

10 thoughts on “It’s deja vu all over again: NZ consultation on climate target set up to be a farce”

  1. Thanks Gareth. The consultation process looks sly and underhanded, and while I’m not an economist anyone understands with modelling you have the ‘gigo’ principle of garbage in garbage out, and we have it in abundance here.

  2. They’re Claytons Consultations, the consultations you have when you don’t want to have a consultation.
    Conspicuous that the NZ Flag consultation in ChCh drew an audience of 10 while the Climate Change consultation (poorly advertised) filled a large lounge at the Russley Golf Clubrooms, standing room only.
    But I don’t imagine Our Glorious Leaders up at Fort Fumble will take any notice of either.

  3. I went to a presentation recently by Adrian Macey who I understand is on the climate negotiations team.
    He said that the government needed “a number and a narrative”.
    From which I took, as low a number as possible and a bunch of weasel words about electricity from renewables, agrarian economy, tyranny of distance, long narrow geography etc etc. In short, the least we can get away with and a semi-plausible explanation for why.
    There was a time when New Zealand didn’t take such an insular view and we regarded ourselves as not only as a responsible nation within the international arena but as a leader that regularly punched above its weight.
    While we navel gaze in a country that is less exposed to the early effects of global warming others are suffering now, heatwave in India and wildfires in Siberia. Of course, not our problem.

    1. I suspected as much. In my submission, among other things I wrote:

      “At best targets are predictions as to the effect of devices established to achieve the same. Without the required tools targets mean nothing useful and are mainly a way of putting the onus of achievement onto a future government while trying to sound like good guys!

      Putting the horse before the cart then is to put the necessary tools and
      regulatory regimes in place that can accomplish this. Then predictions can be made and progress monitored.”

  4. The final nail in coffin of the “Warming Pause” delusion:

    The “denileraties” had pinned their hope on impressing the gullible with their “Global Warming Pause” mantra for several years now. It seems that it has all been not only a short sighted misinterpretation of the overall trend in order to influence the policy debate but has also been based on a fluke in the data all along. A paper just came in from the NOAA that has looked at the “Possible artifacts of data biases in the recent global surface warming hiatus” and found:

    Much study has been devoted to the possible causes of an apparent decrease in the upward trend of global surface temperatures since 1998, a phenomenon that has been dubbed the global warming “hiatus.” Here we present an updated global surface temperature analysis that reveals that global trends are higher than reported by the IPCC, especially in recent decades, and that the central estimate for the rate of warming during the first 15 years of the 21st century is at least as great as the last half of the 20th century. These results do not support the notion of a “slowdown” in the increase of global surface temperature.

    The authors conclude that the warming trend from 2000 to 2014 is virtually indistinguishable from the trend over the preceding 40 years.

    It now seems that 2015/16 is gearing up for a significant El Nino Event which is likely to result a significant spike in temperatures also.

    1. Of cause the rotten eggs of MyWatts, DailyHowler and the assorted set of make believe news outlets run by a handful of right wing propaganda outfits willfully misrepresent the advancement of science as “Data Fiddling”. Of cause had the re-calibration of the data according to latest knowledge found a lower warming trend, they would have celebrated this as a vindication.
      Watts rests on very “reliable” sources for slagging off the new NOAA report by citing non-other than Monckton as “proof” that “there was no warming for the last 18 years….”
      Have these jokers really nothing else than to point in circular fashion from one of their jesters blogs to another in order to maintain their deluded narrative?

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