When a new supermarket in Mt Roskill recently advertised for new staff over 2,700 people applied for the 150 positions. This desperate situation is being replicated up and down the country. It is symptomatic of an economy in trouble.
When asked about this in Parliament last week, Finance Minister Bill English explained that New Zealand ’s “extremely poor performance, particularly since 2004, was simply mismanagement of the economy: excessive Government spending, too much regulation, crunching the export sector, and excessive debt. This government has the job of cleaning up that mess, and then improving New Zealand ’s economic performance.”
I wanted to ask the Minister precisely how he reconciled that answer with his government’s introduction of a carbon tax in the form of an emissions trading scheme which everyone warned would come at the cost of jobs and growth. In a report produced in 2008 report, the New Zealand Institute for Economic Research estimated that by 2012 National’s emissions trading scheme would have lowered GDP growth by $900 million, reduced average household spending by $600, and cost the economy the equivalent of 22,000 jobs. It explained that an ETS would impose major costs on business and cause a contraction in the domestic economy, a loss of competitiveness internationally, a reduction in wages, a contraction in household spending, and an increase in prices. It further identified export industries, especially the agricultural sector as being the most affected, noting that no other emissions trading scheme in the world penalised its farmers by including agriculture.
It is very clear that the direct costs of the ETS, in the form of increases in power and petrol and rising prices across all goods and services in the economy, is having a negative effect in these bleak business conditions. How much it has contributed to the increase in 19,000 people who have lost their jobs over the last few months – to take unemployment back up from 6 to 6.8 percent – is difficult to tell. What is not so hard to ascertain is that the decision was clearly a victory of one-eyed ideology over common sense, thus making a lie of Bill English’s promise that his government is focussing on improving the country’s economic performance.
What makes all of this so bizarre – like a skit out of Monty Python – is that within two years emissions trading schemes around the world that are based on the Kyoto Protocol will collapse. All the expense of setting up such schemes, the huge government bureaucracy that has been created, the costly red tape that has been imposed, not to mention the massive amounts of taxpayers’ money that has been sunk in business subsidies – and let’s not forget the grants to the tribal aristocracy (upon which this government relies as a support partner) – are all an avoidable drain on the economy. In all, this represents an unforgivable waste of valuable time, energy and resources.
In May, the London School of Economics in conjunction with Oxford University published a watershed report outlining a new direction for global climate policy following the death of the Kyoto Protocol at Copenhagen last year. The Hartwell Paper is a collaborative work by 14 authors from the UK, Asia, Europe and North America. In their report they claim that the concept of mitigating mankind’s impact on the climate, which underpins the Kyoto Protocol, is fundamentally flawed because it is based on the notion that mankind’s use fossil fuels is “sinful” and must be punished. In fact, they deride the focus on carbon dioxide emissions stating, “It is now plain that it is not possible to have a ‘climate policy’ that has emissions reductions as the all encompassing goal.” Instead they offer an approach that is based on “adaptation” to the vagaries of the climate, with a focus on the production of cheap and affordable power.
In their paper they also explain, “There is no obvious logical reason for connecting policies for reducing emissions of methane with those for reducing the emissions of halocarbons” thus casting doubt on what has always been a senseless decision by the government to include methane and agriculture in New Zealand’s emissions trading scheme, when most agricultural methane production is through the natural digestive processes of ruminants.
In their paper, the Hartwell scholars condemn the behaviour of those who exaggerated man-made global warming by manipulating data and discrediting those who raised legitimate concerns. One such agency that gets special mention “as a consequence of errors and sloppiness, many of longer standing” is the Intergovernmental Panel on Climate Change (IPCC). This is the United Nation’s agency that Climate Change Minister Nick Smith said he relied on to provide the evidence that justified the National Party’s decision to introduce their emissions trading scheme – instead of suspending it to align with Australia, as many were suggesting including over 4,000 readers of this newsletter (to sign the petition to suspend the ETS – click here ).
The Harwell report explains that as a result of “climategate” and falsifications carried out by the IPCC and other government agencies, “Universities, governments and the United Nations are all now conducting inquiries into many aspects of climate science and the conduct of climate scientists and science bureaucrats. In short, the legitimacy of the institutions of climate policy and science are no longer assured.”
This of course is a live issue here in New Zealand where the legitimacy of claims by NIWA (the government’s National Institute for Water and Atmospheric Research), that our country has experienced greater levels of global warming over the last hundred years than virtually any other country in the world, comes under scrutiny.
The New Zealand Climate Science Coalition, a group led by climate science experts committed to ensuring that New Zealanders receive balanced scientific opinions that reflect the truth about climate change, have lodged a claim in the High Court challenging NIWA’s evidence that New Zealand’s climate has warmed by 1°C over the last hundred years. This temperature increase is almost double the global average for that period and was used by the government to justify an emissions trading scheme.
This week’s NZCPR Guest Commentator, Bryan Leyland, the chairman of the Coalition’s economics panel and electricity industry consultant, explains:
“The New Zealand Climate Science Coalition has asked the High Court to rule on the validity of NIWA’s Seven Station New Zealand Temperature Record (NZTR) that features prominently on its website and is used in information it passes on to schools and is also used to support the emission trading scheme, resource consent applications for wind farms and many other key aspects of policies designed to ‘fight climate change’. If this action succeeds, NIWA will be obliged to withdraw the Seven Station series and all the advice that they had given based on it. They will also be required to produce a new NZTR, which is both transparent and independently peer reviewed.
“From information available on NIWA’s website, Coalition members have been able to plot temperatures from 1900 to the present based on the actual readings of the thermometers and based on the readings from the same thermometers after adjustment by NIWA. The unadjusted readings showed an insignificant warming of 0.3°C per century while the adjusted readings show a warming of 1°C per century.”
In his article NIWA and the New Zealand Climate Science Coalition, Bryan reminds us that official claims of excessive warming have extended further than just paving the way for the government to introduce an emissions trading scheme: “ New Zealand ‘s temperature record has a disproportionate effect on global estimates, because there are very few long-term temperature stations in the Pacific Ocean . It influences government policies, at central, regional and local level, in their policies to ‘fight climate change’. These include the economically damaging emissions trading scheme, devaluing seaside properties because of fears of extreme sea level rise, incentives for expensive and ineffective windfarms and disincentives for what could be really useful – new fossil-fuel power generation.”
No matter what the outcome of the court challenge, it is only foolish governments that think they can control the climate by imposing financial penalties on their citizens. Common sense should tell them that climate cycles and climate ‘events’ are natural and cannot be controlled by man. And if they doubt that, they should just remember Eyjafjallajökull (now try and say it!) the Icelandic volcano that has discharged enough carbon dioxide to negate much of man’s long term efforts to control emissions.
The Hartwell paper indicates that a sea change in thinking on climate change is taking place. This is no doubt driven to a large degree by the fact that climate policies are having a crippling effect on economies.
In the US , the Senate has finally thrown out their emissions trading scheme bill on the basis that citizens should not be penalized by a reduction in living standards for something that cannot be validated. However, in Britain , energy prices are expected to surge 10 percent by Christmas, putting huge pressure on household budgets, as the cost of the government’s climate change polices – mainly carbon emissions reduction and the promotion of uneconomical renewable energy schemes – look set to treble over the next decade.
Meanwhile New Zealanders face financial penalties and a reduction in living standards because of National’s emissions trading scheme – and while it will have no effect on the climate, it has become a millstone around the neck of our fragile economy.
1.NZIER, The impact of the proposed Emissions Trading Scheme on NZ’s economy
2.London School of Economics, The Hartwell Paper