Support for greening the economy

by Bryan Walker on September 26, 2011

It’s been interesting to see some NZ Herald articles bearing on the Green Party’s “100,000 green jobs” policy which I discussed a few days ago.

John Armstrong shared my view that the Green’s jobs policy deserved more than the “ritualistic slagging” offered by John Key and Steven Joyce.

National might still claim the Greens do not understand economics. The purpose of yesterday’s policy release was to demonstrate the Greens do understand – and are deadly serious about remedying the economy’s structural weaknesses, though not in a fashion National would favour.

And today, rather surprisingly, appeared an editorial under the heading “Greens’ policy on energy to be applauded”.  The editorial is hardly an enthusiastic endorsement of the policy, but it does recognise that, particularly in the area of geothermal energy, diversification overseas to areas of strong demand is an attractive revenue option.

In conclusion it recognises, after caveats, that there may be economic benefit in the kind of greening of the economy the policy envisages:

At the very least, however, they have delivered a scenario that exploits this country’s environmental credentials and technological expertise. For that, they should receive some credit.

The article that most gained my attention was a short report by journalist Peter Huck. It doesn’t refer to the Greens’ policy, but it does emphasise the economic opportunities in renewable energy which the Greens are pushing. It instances a 2009 PricewaterhouseCoopers report which suggested an export industry producing $7.5 billion to $22 billion annually, growing by 4.5 per cent each year.  It notes criticism that the Government is tardy with R&D investment and is missing the chance to diversify our narrow economy by supporting renewables at home and in developing economies.

We wouldn’t need a big share of the international market to make a very good return:

The International Energy Agency predicts that tackling climate change will generate US$27 trillion in renewables demand by 2050 in developing economies alone.

Local lobby group Pure Advantage, which advocates a low-carbon future for New Zealand, reckons the global market is worth $1 trillion a year.

But we’re facing in the wrong direction:

Yet, in a nation blessed with renewable energy sources, the Government’s Energy Strategy favours marine oil and gas reserves.

“I don’t think it’s logical that we can increase investment in fossil fuel extraction and not damage our clean, green brand,” says Pure Advantage’s chairman Rob Morrison. “And there will be economic consequences if we do damage the brand. We can only be a bit player in terms of fossil fuel extraction. We can be an absolute leader in terms of clean and green solutions.”

Take geothermal, an area where New Zealand seems well-placed to export know-how. China has earmarked $15.4 billion for geothermal energy, and SinOpec Group, the Chinese energy giant, has signed a five-year deal with Iceland to develop Inner Mongolian resources.

“We need to export clean and green solutions,” Morrison says.

It’s worth keeping in touch with the Pure Advantage website and offering them support. They’re a group of business leaders who advocate the competitive advantage of green growth. Here’s their reasoning:

Because green growth is worth $6 trillion per year world-wide. More than defence. More than aerospace. New Zealand’s green reputation gives us a head start in this business. Shame we’re not really in the race.

We’re a primary producer with a big carbon footprint and a cavalier, she’ll-be-right attitude to our environment, and what its degradation means to brand New Zealand.

We’re eroding our 100% Pure image, and putting our crucial tourism and export industries at risk.

We need to break out of our short-sighted commodity attitude and embrace our competitive advantage in being green.

It’s time to walk the talk. Investigate the data on what motivates New Zealand to go green growth, and where the risks lie in running business as usual.

We know all too well where the risks lie in business as usual. So far as climate change is concerned they are enormous, as is already beginning to be apparent. But business as usual will fight to continue. Pater Huck has another much longer Herald article which is well worth reading in which he chronicles the global fightback of fossil fuel interests against renewables. It’s a skewed conflict while fossil fuel industries are left “uncoupled from the cost of carbon emissions”. The status quo, he mildly concludes, looks well overdue for a reality check.

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