When the facts change, I change my mind. What do you do? – JM Keynes
The 2022 Budget took more taxes from working New Zealanders than any before in history, and at a time when real wages were plummeting at record rates.
Why? So that Labour Ministers could spend billions of extra dollars on their vanity project – the quest to lead the world in Climate Change spending; so as to realise the advertised “nuclear-free moment of the Prime Minister’s generation”.
The Green Party Minister, James Shaw, wanted to move even faster and further than the proposals of his highly-academic Climate Change Commission (CCC), which had formally called for long-lived greenhouse gas emissions to be cut by 63% by 2035 (leaving only 37% to be removed in the following 15 years).
The absurd logic for this front-end-loading is that “it could cost more” if delayed – although even Blind Freddie knows that future mitigation costs will only reduce as technology improves over time.
Cure worse than disease
Always and everywhere, the collective costs of planned rich-world Climate Policies far exceed any forecast reduction in 2100 GDP that might be caused by worst-case scenarios of unmitigated Climate Change[1].
But this issue is much more pronounced in New Zealand:
- Our greenhouse gas emissions are less than one-fifth of 1% of the global total. They are a fraction of a drop in a bucket. They can make no conceivable difference to future global average temperatures.
- Our current emissions-reduction pledge is FIVE (5) times greater than the global average. The mean 2030 figure for 193 countries is 9%, while New Zealand’s figure is 50%. (This is worse than unilateral disarmament.)
- New Zealand has already over-achieved the Net Zero target. Right now, our country is a net carbon sink, and the vegetation in our National Parks alone absorbs more than four times our annual human-related emissions. Alas, as a result of artificial, poorly-negotiated rules, our pre-1990 native forests are ignored in counting our National Inventory for UN purposes. But the scientific fact remains that, if this country were to disappear under the waves tomorrow, there would be more CO2 (not less) in the global atmosphere. In a nutshell, while politics sees us as a net emitter, science sees us as a net sink.
- Thanks to our hydro-power and lack of industry, New Zealand has always been one of the lowest per-capita CO2-emitters in all of the developed world – even if our natural vegetation is ignored. Climate campaigners have long played down this important fact (lest it might breed complacency).
- Climate activists say that short-lived biogenic methane also adds to current global warming – but science has now exploded this claim. For every new molecule emitted today, an old molecule from the same herd disappears. Accordingly, inflows are matched by outflows, and there is no net addition to the stock of methane in the atmosphere. There has been much new atmospheric research since the old Kyoto Protocol days, but the current government has its fingers stuffed in both ears.
- The Government has never investigated the actual feasibility of its ‘Net Zero by 2050’ project. It has no accompanying energy production plan. But a leading NZ engineer has shown that New Zealand lacks the physical resources to complete it – even if we were to outlay all of the $550 billion ($330,000 per household) of estimated costs. Put simply: it can’t happen, so it won’t happen.
- All of the budgeted taxpayer billions will make not a whit of difference to our emissions tonnage over the next 15 years.That level is determined solely by the ETS “cap” and all the Government’s haphazard spending merely has the “waterbed effect” of reallocating the financial pain.
- Our Government’s Climate and Energy policies are incoherent –
- because they banned gas exploration (a world first), they now need to import record amounts of Indonesian coal to keep the lights on;
- the half-hourly wholesale price of all our carbon-free hydro-power is almost wholly driven by global coal prices;
- they fiercely increased taxes on all sales of motor fuels, but now subsidise petrol prices (out of the Covid-19 Fund);
- our single oil refinery has closed in the midst of a global refining famine;
- the renewable proportion of our electricity usage is lower today than it was in 2017;
- aiming to “lead the world”, they intend to import most of the credits required for their ambitious carbon budgets (ie just spend more of our foreign exchange reserves than other countries do);
- after first allocating $500 million to the One Billion Trees Fund, they have now amended the ETS to exclude credits for permanent exotic forests;
- they are determined to cull the world’s most carbon-efficient dairy herd, so that global dairy-products consumption will inevitably involve higher global emissions;
- they are introducing the world’s first tax on farm animals, despite the Paris Agreement’s explicit direction to prioritise food production;
- their “cash for clunkers” scheme will cost taxpayers over $10,000 per tonne of permanent CO2 reductions, while Air New Zealand (a Government subsidiary) can provide carbon offsets for less than $20 per tonne.
- all of Minister Shaw’s policies bear most heavily on the very poorest sections of our economy. These households are the ones who will crack first under the pressure of ever-higher energy costs. While more affluent households will be hurt, they will not be forced to forego energy to the point of slashing their living standards.
- None of the Government’s countless climate-justified projects have ever been the subject of a standard Treasury cost/benefit study or even a fully-costed Regulatory Impact Statement. All indications are that every tonne of CO2-e reduction achieved by the 2022 Budget schemes will cost us way more than $75 – the current ETS cost[2]. Our left-wing politicians demonstrate little interest in maximising “bang for the buck” – their entire focus is on the exciting opportunity for “economic transformation” and/or “the Great Reset”.
- Almost all of this Government’s mitigation projects rely upon artificially hiking the cost of everyday energy, thereby making it unaffordable for less affluent people to keep doing things that cause emissions[3]. But most of the Government’s price-hiking programme for the next decade has already been coincidentally achieved by the market-driven doubling of oil prices – so the Government should now stand down, gather the data, and discover the actual price-elasticity of energy in diverse applications. Will high prices actually slash emissions? Or will it be all pain and little gain?
This Government has spent five years rolling out a Climate Policy it formulated back in 2017, and has not lifted its head to take account of all the many changes occurring in this dynamic area:
- Nobody now believes that we are in the midst of a “climate emergency”. Global warming has unexpectedly stopped or paused. Over the last 7 years 10 months, NASA satellites show a slight decrease in the trend of the global average temperature anomaly (GATA)[4]. This hiatus was not forecast by the UN’s models.
- The IPCC is currently forecasting that the global average temperature will increase by less than 1.3°C during the 22nd Century, even on a “business as usual” basis (ie no more policy changes). That rise is about the same as we have already experienced during the past 100 years – an era that provided prosperity unknown to any previous generation.
- The centuries-long gentle rise in relative sea levels has not accelerated at all during the past 100 years. This is consisting with the findings of an Auckland University research team that over 75% of the measured islands in the Pacific Ocean have expanded their land areas during the past 50 years.
- Under-reported hard data has exposed a great many climate-related fallacies:
- Global glacier melt began in 1800 (after the peak of the Little Ice Age) and their retreat rate has not accelerated since the 1950s – when human-caused emissions took off.
- New Zealand glaciers advanced during 1980-2005. While warming causes melting, it also increases nearby ocean precipitation – which adds to the snow-pack.
- Global sea-ice cover has been stable for 50 years. The predicted ice-free Arctic shipping routes have not materialised and are unlikely to do so.
- The number of polar bears has trebled since 1983.
- The trend of weather-related damages as between 1990 and 2020 declined from 0.26% of global GDP to 0.18%.
What the media and politicians and activists say about climate science has drifted so far out of touch with the actual scientific literature as to be absurdly, demonstrably false.
- The Paris Agreement documents the aim of 193 World Governments to achieve net zero CO2 emissions “during the second half of this century” – ie before the year 2100. But activists and the corporate media have distorted the word “during” to “before” – and most of our politicians have happily gone along with this deception. While ‘Zero by 2050’ may make a fine slogan for a bumper sticker, it is the antithesis of a rational, fit-for-purpose Government policy to take us into an uncertain future.
- The CCC’s emission budgets reflect the Zero Carbon Act’s aim for reductions that produce a (modelled) global average temperature below 1.5°C by 2050. But Finance Minister Robertson knows that this is no longer an achievable goal. China, India and Russia, who are responsible for more than half of global emissions, have all declared their intentions to increase emissions over the next decade. At the latest G20 meeting in Bali, all the BRICS countries rejected the 1.5°C goal as being inconsistent with current IPCC science.
- Civilisation still depends on hydrocarbons (oil, gas and coal) for 84% of all its energy requirements, which is only about 2% less than in the year 1990. The International Energy Agency (IEA) expects this percentage will be greater in 2040 than it was in 2021, in its ‘most likely’ scenario. The IEA is funded by all OECD countries (including New Zealand) to amass the expensive resources needed to make rational and explicable forecasts of future global energy needs. Despite being the soul of diplomacy, the IEA clearly disbelieves the high-sounding political rhetoric about 2050.
- Although there was a huge slump in global economic output during the first Covid-19 year (2020), there was no, repeat no, measurable decrease in atmospheric CO2. This real-world experiment highlighted the impossibility of the quest to reduce future temperatures by slashing current living standards. The goal cannot be achieved by austerity – only major technology change can engineer the gradual phase-out of fossil fuels.
- Despite the EU’s culture and politics of chronic self-deception, the gas-starved EU countries are right now providing us with a telling window into the future. The EU itself has abruptly reclassified both natural gas and nuclear power plants as “Green”, so they are entitled to sustainability subsidies. The UK and France are committing to 22 new nuclear reactors; Germany is reopening coal plants; other countries are building LNG receiving terminals with 20-year gas supply contracts. Most countries are moving their Climate Policies into a post-apocalyptic phase.
- For purely political reasons, we in New Zealand have out-spent all of our trading partners, with the saintly goal to “lead the world” – but not a single big emitter (or anybody else) is ever likely to follow us. The Paris Agreement sets up a multilateral team effort – so why are we not bench-marking our investment levels against those of comparable countries? Why are we sacrificing key priorities (health, housing, cost-of-living) in order to do more than “our fair share”[5] in Climate Policy?
After a global pandemic, which induced unheard-of levels of money printing/borrowing, followed by a wave of economic stress from a major energy price shock – the policymakers in most countries are now in a sombre mood.
It is time for the chronic self-deception surrounding Climate Policy to be replaced by some hard questions. What, exactly, are we getting for our money? Why can’t we see a prospectus – or at least some sort of calculation showing the expected future Return on Investment?
For each $1,000,000,000 of Budgeted investment in Climate Policy how much reduction can New Zealand taxpayers expect to see in the 2100 global average temperature? By now, everybody knows that the answer is zero. Zip. Nothing. So, what else do we get? Applause for our Ministers at global climate conferences, perhaps. A nod of appreciation from some foreign politicians.
McKinsey has estimated that, if applied globally, the slogan ‘Net Zero by 2050’ would cost more than $5 trillion a year for the next three decades. That figure would be one-third of total global tax revenue – which means a 33% average reduction in all government spending on health, housing, education, social welfare, police, climate adaptation, defence, social justice, etc. How long would that be tolerated in any genuine democracy?
How long will New Zealand voters tolerate under-investment in all other public services to accommodate massive over-investments in the ambition of some politicians to ‘lead the world’ in Climate Policy?
Footnotes:
[1] The UN expects the average person in 2100 to be 450% richer than in 2010; but believes that Climate Change damage could reduce that increase to only 434%.
[2] International airlines manage to sell ‘carbon offsets’ for less than $20 per tonne. Why not sub-contract them (or other private sector players) to deliver ALL the credits the Government is buying for its initial carbon budget?
[3] Although mostly sticks, there are some carrots – eg for Tesla owners.
[4] The current GATA is only 0.2°C warmer than the 1979-2000 average, a difference which is less than the margin of measurement error.
[5] The promise for the previous 18 years under Governments led by Helen Clark and John Key