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Dr Muriel Newman

The Way Forward

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In the year to August, 33,300 Kiwis packed their bags for Australia, the highest figure since 1989. That includes 2,900 in August alone. One particularly worrying aspect is that so many of those leaving New Zealand are young: 86 percent are under the age of 45 and the majority are under the age of 30.[1]

It is very serious indeed when so many of our young are saying that the grass is greener on the other side of the ditch.

Taranaki-born Stephen Jennings, the head of the Russian-based Renaissance Group and one of New Zealand’s richest men, has spoken out about how New Zealand is losing its way and squandering its potential: “no other comparable country had as many young people living and working overseas – and isolation was not an excuse”. In an interview with the Herald, he explained how “the world’s developing economies were growing at an unprecedented rate and New Zealand needed a more entrepreneurial economy to keep up”. He then advocated that the way forward should involve, “reducing the size of government, changing the welfare system, reducing taxes and debating ‘sacred cows’ such as the health system”.[2]

With New Zealand’s economy in recession and the overseas financial markets in turmoil, his advice is timely. However, rather than implementing measures to foster entrepreneurship and boost wealth creation, our government has given us an Emissions Trading Scheme (ETS). In spite of all of the rhetoric about how an ETS will save the planet, its key goal is the reduction of economic growth as that is the only way to reduce carbon emissions. Based on flawed science and a trading model that has proved to be disastrous wherever it is operating, New Zealand’s ETS is destined to become a significant drag on the New Zealand economy.

Professor Zbigniew Jaworowski, Poland’s Senior Scientific Advisor at the Central Laboratory for Radiological Protection in Warsaw, is this week’s NZCPR Guest Commentator with an article Sun Warms and Cools the Earth. Professor Jarowoski has had a distinguished scientific career during which he has demonstrated that some of the key scientific evidence on ice core data, that has been used by the United Nations Intergovernmental Panel on Climate Change (IPCC) to justify human causation of global warming (the basis of carbon trading schemes such as ours), is wrong: “During the past 16 years I presented data demonstrating that polar ice does not fulfill the close-system criteria, essential for reconstruction of chemical composition of the ancient atmosphere. This had practically no effect on a worldwide acceptance of the false, ice core based, dogma on the human causation of the Modern Warm Period”.

Furthermore, he has been outspoken on the political agenda that is driving global warming scaremongering, quoting a leading United Nations proponent: What if a small group of world leaders were to conclude that the principal risk to the Earth comes from the actions of rich countries? And if the world is to survive, those rich countries would have to sign an agreement reducing their impact on the environment. Will they do it? The group’s conclusion is no. The rich countries won’t do it. They won’t change. So, in order to save the planet, the group decides: Isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring that about? This group of world leaders form a secret society to bring about an economic collapse.”

Professor Jaworowski also points out, that contrary to what the global warming alarmists keep telling us, the climate is getting cooler. He explains that the sun, not humans, is the major driver of climate change and that the absence of normal sunspot activity could be signaling the start of a cycle of serious global cooling not warming:

“Sun activity is reflected in the number of sunspots, which normally shows an 11-year periodicity. The current sunspot cycle no. 23 had a maximum in 2001. NASA officially declared it over in March 2006, with a forecast that the next cycle no. 24 will be 20 to 50 % stronger than the old. But until now the Sun remained quiet, with only few sunspots sighted both from the old cycle, and from the new one declared again by NASA to start on December 11, 2007. However, the Sun’s activity was still low in the first part of 2008 and August 2008 was the first month without sunspots since 1913. It seems that we still remain in the cycle 23. The unusually long low activity of Sun suggests that we may be entering a next Maunder Minimum, a period from 1645 to 1715, when almost no sunspots were visible. This was the coldest part of the Little Ice Age (1250—1900), when rivers in Europe and America were often frozen, and the Baltic Sea was crossed on ice by armies and travelers”.

What Professor Jaworowski graphically highlights is the fact that not only is man’s influence on the earth much more limited than the scaremongers like to claim, but so too is our understanding of these matters. In this context the passing of the Emissions Trading Scheme just before a general election can be viewed as extremely reckless.

The acclaimed environmentalist Bjorn Lomborg has also struck out at emissions trading schemes claiming that they are excessively expensive and extremely ineffective. In particular he has criticised political leaders who use the argument that the cost of action to reduce global warming is low compared to the high price of inaction: “One commonly repeated argument for doing something about climate change sounds compelling, but turns out to be almost fraudulent. It is based on comparing the cost of action with the cost of inaction, and almost every major politician in the world uses it”.[3] His point is that the hugely costly ETS schemes being promoted by the United Nations – and that New Zealand has adopted – are designed to reduce global temperatures by an insignificant 0.05oC by the end of the century.

Having read that article I revisited Helen Clark’s Statement to Parliament in February 2007 to see how our Prime Minister justified the planned imposition of a carbon tax (for that is what an emissions trading scheme really is). She said: “Now the quest for sustainability has taken on a new urgency because of the scale of the environmental challenge the world faces. Traditional patterns of development and fast growing populations have put an intolerable strain on the planet. The future economic costs of doing nothing are dire. That’s why issues around sustainability and climate change have become the compelling issues of our times, dominating international forums and agendas”.[4]

In Germany, where Chancellor Angela Merkel also used that same justification for joining the European Union’s emissions trading scheme – “the economic consequences of inaction will be dramatic for all of us” – the cost of the scheme is now endangering the whole economy. Just last week Reuters reported that the cost of carbon is expected to skyrocket and power prices are expected to double, threatening investment, competitiveness, and thousands of jobs.[5]

This is extremely grim news for New Zealand given our government has tied our ETS into the European Union’s volatile price of carbon which has already risen by 30% over the last year from €23 (NZ$48) per ton to nearly €30 (NZ$63).[6] What is even more worrying is that New Zealand now stands alone as being the only country to include our crucial agriculture sector in the scheme.

With the ETS set to become a huge drain on our economy, the task of lifting our game so that we don’t continue to lose more New Zealanders to Australia is an even bigger challenge. According to a new report published by the New Zealand Institute of Economic Research, New Zealand’s average income, defined as GDP per capita, is now three quarters that of Australia and even lower than in Australia’s poorest state, Tasmania. The report calculates that in order to catch up with Australia within five to 10 years, New Zealand would need to grow at between 4.7% and 7.6% per year. This is not an impossible task as Ireland, for example, has a growth rate that has exceeded 5% per year for the last 15 years, moving from being the poorest country in the OECD in 1970 to the top five since 2002. Meanwhile New Zealand has slipped from 8th place in 1970 to 22nd in 2006.[7]

At the present time doing business in New Zealand is extremely tough, with sales falling and costs rising. That is why tackling the impediments to business growth and providing an economic environment in which entrepreneurialism can flourish, is such an urgent priority for the new government.


1.Business Day, Record number of Kiwis head to Aust

2.Herald, Kiwi billionaire sends hurry-up message to the people at home

3.The Australian, Climate change heroes’ sham case

4.Helen Clark, Prime Minister’s Statement to Parliament for 2007

5.Reuters, EU’s CO2 Plans Are A Cost Disaster: German Industry

6.Speigel, Killing Jobs to Save the Climate

7.NZIER, When will New Zealand catch up with Australia?