It’s Time to Cool It

Thirty-two years ago, Tom Wolfe, author of The Bonfire of the Vanities, attended a university conference titled ‘America in the Year 2000’ that featured a series of grim forecasts of life in the future. Writing about it some years later, Wolfe described the final symposium where a young ecologist announced he would rather not be alive in America in the year 2000. Due to the rape of the upper atmosphere by aerosol can users, he explained, a certain ion would no longer get through the atmosphere to the earth, and this particular ion was indispensable for bone formation.

“No bone formation!” wrote Wolfe. “Suddenly I had a vision that was worse than any that had come to me in the preceding 36 hours. I could see those marvellous women that I enjoyed watching walk down Lexington Avenue near where I live in New York City with their five-inch, pyramid heel, three-colour, patent-leather, platform-soled shoes, and their blue jeans, and I could suddenly picture them dissolving into blobs of patent leather and denim on the sidewalk, inching and suppurating along like amoebae. And I could see the blind news dealer down at the corner of Lexington and Sixty-First Street trying to give change to a notions buyer from Bloomingdale’s, and their hands run together like fettucine over a stack of New York Posts. It was worse than anything I had ever imagined in my life.”

Mercifully, we appear to have averted this dire threat. But today’s doom-mongers have shifted their sights to an equally scary prediction: global warming, bringing melting polar ice caps, calamitous weather events, malaria epidemics, extinction of some species, loss of habitat for humans – the chief scientist of Britain’s Labour Party has even gone so far as to predict that by 2100 the Antarctic could be the only habitable continent, with a few surviving breeding couples left to propagate the human race.

This is over the top. Alarmism such as in Al Gore’s movie has been widely discredited, as has the Stern Review. The likelihood of extreme scenarios is low, and the human capacity to mitigate and adapt to trends over time is high. There is a strong consensus among leading economists internationally that aggressive early action is unjustified.

The New Zealand economy is too small to affect global emissions, and it is pretentious to think New Zealand can much influence the policies of major countries. Moreover, the stark reality is that there are currently no low-cost ways of materially reducing New Zealand emissions, and action could hit low-income people hard.

New Zealand should not be the last cab off the rank in taking policy action, but nor should it be out in front. Households and firms are already responding to climate change, independently of government. But to be a responsible international citizen and protect its commercial interests, New Zealand should move in line with its major trading partners, in particular Australia and the United States.

What is needed as a foundation for sound policy is a careful analysis of the case for policy action, recognising that moderate warming could benefit New Zealanders in many ways. Unless such a case is established with widespread buy-in, we will see further botched initiatives such as the aborted methane and carbon taxes and the Kyoto forestry fiasco, and ongoing policy instability.

If and when further action is warranted, a broad-based approach covering all sectors, and the use of market mechanisms (such as a low carbon tax), would impose the least economic costs. Agriculture and transport should not be exempt. The Business Roundtable and other major business organisations oppose the current proposals for applying an emission permits regime narrowly to the electricity sector, which could see electricity prices doubling or trebling, and to take the property rights of forest owners in carbon storage without compensation.

Among all the hot air in the climate change rhetoric is the government’s lofty goal of ‘carbon neutrality’, an idea that bears no relationship to reality. Ministry for the Environment figures (included in the Business Roundtable’s submission available on www.nzbr.org.nz) suggest that even if New Zealand were to shut down the whole of its agricultural sector, and to ban the use of all cars and other transport, and even if economic growth were to stop entirely (contrary to the government’s ‘top priority’ goal of faster economic growth and higher incomes), achieving carbon neutrality would be unattainable for the foreseeable future.

New Zealanders are as likely to opt for such a scenario as they are to plan for a mass evacuation to the Antarctic or for Tom Wolfe’s vision of life without bone formation. A cool-headed approach based on rigorous science, proper policy analysis and much more consultation is required to establish the costs that New Zealanders are willing to bear to support action on climate change.

Roger Kerr is the executive director of the New Zealand Business Roundtable.

ENDS

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