Hon David Parker
Minister responsible for Climate Change issues
3 August 2006
Speech
NZ Business Council for Sustainable Development
Good afternoon. Thank you for coming to this session on climate change.
The New Zealand Business Council for Sustainable Development is a leader in business circles and recognises how our
economy and the environment and social development are linked.
Most organisations, be they business organisations or NGOs, recognise that climate change is a critical issue of our
time, and some have actively engaged with me on ways that government and business and others in our community can work
together to deal with it.
I’m not here today to preach - I know that you know that we’re grappling with an issue that isn’t amenable to a quick
fix, and that requires not just a concerted effort, but important changes in the way we live and work.
Today I want to outline the government’s thinking how we’ll have to work together to tackle climate change.
Conditions that NZ will have to adapt to
It’s clear that for policy purposes we have now moved beyond a debate about whether climate change is occurring, to what
must be done.
We know that the future will see changes to average temperatures and rainfall, sea levels will rise and we will have to
contend with more frequent and more extreme weather events such as floods, droughts and storms.
Events like these could be devastating to our economy, as we know from experience - the floods in February 2004 are
estimated to have cost well over 300 million dollars with some farmers still recovering.
The cost of the 97/98 drought is estimated to be one billion dollars, and is thought by Treasury to have triggered the
economic recession in the late 90s.
So we have to bear in mind the potential costs of a changing climate when making policy decisions.
However – no matter what we do - at least some of these events will come to pass because of the greenhouse gases that
have already been emitted or inevitably will be.
As a biologically based economy, New Zealand is particularly vulnerable to an unstable climate. So we must act, if we
are to maintain our competitive advantage and protect our agricultural base.
Some of the future costs of climate change can be avoided or reduced by sensible planning now to protect things like
roads, sewerage systems, electricity transmission, water reticulation, and telecommunications. These assets have useful
lives measured in decades not years. Many costs can be avoided or reduced by taking sensible steps when this
infrastructure is routinely replaced or upgraded. Relevant government agencies will be working to achieve this.
Climate change also has the potential to affect NZ through events that flow on to us from elsewhere in the world.
For example, more frequent and severe cyclones and coastal inundation in Pacific Islands will impact on New Zealand's
responsibilities for aid and disaster recovery, and increase immigration pressure.
Ecologically, whole systems are threatened. Already large parts of the Australian Great Barrier Reef are dying as sea
temperatures and acidity change.
Hurricane Katrina in the US has shown that a single large climate event can affect global oil prices, and petrol prices
in NZ.
Global insurance companies such as Swiss Re and IAG are consistently warning about the implications of climate change
for insurance cover.
Losses due to weather-related events have been rising much faster than losses due to other natural causes such as
earthquakes. Rising re-insurance costs will affect NZ insurers, and availability of insurance for ordinary Kiwis no
matter what happens in NZ itself.
It's fair to note that it's not necessarily all doom and gloom. Some of the more immediate flow-on effects of climate
change could be positive for New Zealand, or at least have positive aspects. For example, more droughts in Australia
could give New Zealand’s agricultural exports a competitive advantage. Similarly, the winter tourism season is likely to
make Australian ski-fields less economic much earlier than New Zealand ski-fields, leading to an increased influx of
Australian winter tourists.
It will depend on the ingenuity and foresight of our business community whether we will be able to make the best use of
the opportunities if and when they occur.
But in the meantime, the work government is doing on adaptation will allow us to reduce risks and increase opportunities
arising from the unavoidable effects of climate change.
Building a consensus
Climate change is an amorphous, and esoteric issue. It seems complex to many. New Zealanders tend to identify it as an
environmental concern second on the list to pollution. In the absence of an understanding of what to do, many wring
their hands, and move on. We want to build a consensus.
Suggestions have been made that we can just tell people what to do or wait for some miracle technological cure. But we
need a far more comprehensive and sophisticated approach – an approach that changes behaviour. An approach that:
- Starts from where people are, not where we want them to be
- Emphasises practical steps which make common sense for other reasons people identify with. (People don't argue against
insulating houses, planting forestry in areas subject to soil erosion, and protecting our infrastructure.)
- Uses social and economic mechanisms that have the greatest effect on behaviour that has to change e.g. social status,
costs and incentives
- Frames climate-friendly behaviour as a set of automatic preferences that are a normal part of the way we operate – not
just an environmental issue that characterizes current practice as bad.
- Builds a mosaic– building behaviour change piece by piece, and creating stronger associations over time between the
effects of climate change and the ‘commonsense’ actions that more and more New Zealanders are taking.
- Does what can already be done using existing technology and knowledge
The government is sincerely interested in engaging with all sectors and communities as it considers a wide range of
policy responses to climate change. I want to build a comprehensive and durable consensus as part of our process of
developing policies that will affect all communities throughout New Zealand.
As part of this, I want people to understand the context in which policies will be framed. The essential elements are
that:
- Climate change is a major economic and environmental and social issue that affects us all and that will be with us for
the foreseeable future
- Policies to deal with climate change will have to be durable over the long term – short term responses are relevant
but not enough
- NZ must be part of a concerted international effort to combat climate change – we have to pull our own weight and try
to influence other countries that can make a difference.
- There will be some economic cost – not excessive – we will still grow in prosperity but we will focus on climate
change not Kyoto.
The Government's work programmes are framed within this context and have three main objectives:
- to develop long-term solutions to climate change issues
- to take short-term measures to reduce greenhouse gas emissions that are consistent with long-term approaches as
we transition to a way of life that reduces our greenhouse gas emissions and secures a prosperous future
- to adapt to the impacts of climate change
Short term, we will be concentrating on policies which focus on sectors of the economy, but it will be most important
that the policy initiatives we have in the short term are consistent with our longer-term policy settings.
The cost does not arise from Kyoto, it arises from the need to change our emissions from business as usual as we
transition. Our policies will try to achieve practical reductions at the lowest cost. They will involve a mix of
regulatory steps and economic instruments.
As we advance our 15 work programmes, we will be talking with organisations and interested groups throughout the
country.
Amongst other things, the Ministry for the Environment will hold workshops on adaptation, and is convening a focus group
of industry experts to provide advice on the implications of options around alternatives to the carbon tax including
emissions trading.
The Ministry of Economic Development (MED) and EECA are in the process of meeting with business representatives to
discuss future energy directions for development of the NZ Energy Strategy and to provide comment in relation to the
National Energy Efficiency and Conservation Strategy.
Once a draft is produced it will be widely consulted upon. Already, helpful documents have been produced by yourselves,
IPENZ, the Centre for Advanced Engineering, and the Centre for Energy.
The Ministry of Transport is working with EECA and MED as well as transport industry associations on a range of issues
including vehicle emissions, biofuels, public transport, fuel efficiency and fleet purchasing. Fleet efficiency is an
area where I encourage you to continue to engage at ministerial and official level.
Engaging with industry organisations on proposals for forestry policy and agriculture policy is a high priority.
The key challenge is to strike a balance between flexibility around the options and uncertainties we face, while
providing enough direction to provide a reasonable level of certainty that the strategic objectives we decide to pursue
will be achieved.
It's a challenging road ahead of us, but this government is committed to making a difference, and to bringing New
Zealanders along with us. And I expect many of you here today to play an important role in achieving those goals.
Thank you.