Climate Change in New Zealand - Turing off the carbon taps
By Shaun Bowler
The New Zealand Institute of Economic Research (NZIER) recently suggested that New Zealand’s current environmental priorities are wrong. They suggest that as a country we should focus less on reducing greenhouse gas emissions and more on adapting to the effects of climate change. In addition, say the NZIER, we should prioritise improving air quality and protecting our biodiversity over reducing greenhouse gas emissions and waste minimization.
NZIER’s reasoning, however, is not only flawed but dangerous to serious policy outcomes and the well-being of New Zealanders. Their attempt to prioritise these important goals show how little they understand sustainability. Let’s examine how.
The NZIER’s first basic error is trade-off thinking, or the idea that if one environmental outcome is improved, then others must necessarily suffer. This error is based on applying an obscure economic concept called the ‘zero sum game’ to sustainability. The zero sum game means that if we put our efforts into say, reducing greenhouse gases, we will have fewer resources to focus on air quality or some other environmentally desirable outcome. However, the real world is not like this. Sustainable development shows us that one intervention can have multiple benefits.
For example, in the 1970’s Sweden started to reduce its dependence on fossil fuels. At the time, this was driven by energy security concerns. Sweden is now in the enviable position of being one of only two countries on target to achieve its Kyoto emissions commitments. The Swedes have also become world leaders in bioenergy, which accounts for 28% of Swedish energy supply. They export bioenergy technology and knowledge. NZIER’s contention that ‘stretch’ targets for emissions reduction will lead to economic and social disaster, is clearly incorrect, as the Swedish example shows. For New Zealand, pursuing similar aggressive bioenergy targets will also improve air quality. Clean, carbon-neutral fuel would replace large amounts of dirty coal, which currently contributes to poor air quality in some New Zealand cities. Low-carbon technologies are already having a positive effect on air quality in Christchurch, and the health of its citizens. Sustainability is not a zero-sum game – improve one outcome, and others surely follow.
NZIER’s prescription views sustainability policies through a rational economic lens. However, looking at the world through this narrow lens actually inverts reality. In the real world, the economy exists only within human society, which in turn exists only within, and courtesy of, the environment and its ecosystem services such as water, arable soils and an inhabitable atmosphere. The economy is therefore a wholly owned subsidiary of society and the physical environment. So instead of assessing environmental and social policy through an economic lens, it is more realistic to view economic policy in terms of its impact on society and the environment. This view is known as ‘strong sustainability’. Strong sustainability has now superseded the ‘Triple Bottom Line’ or ‘weak sustainability’ view that underpins NZIER’s thinking.
The suggestion of focusing on adaptation (coping with the effects of climate change, rather than trying to prevent it) rather than mitigation (trying to prevent climate change), is just plain nonsense. Here’s why: Imagine that you are running a bath. You forget about it for a while, only to be reminded when water drips from the ceiling. You run upstairs and find water flowing down the hall carpet from under the bathroom door. What would be the first thing you did? You could sandbag the bathroom door to halt the water. You could race down to the garage, and return with tools and plywood to build a higher sides on the bath, thus temporarily preventing the overflow. These solutions are adaptation.
However, most people would immediately stride over to the bath and turn the taps off. This is mitigation. In climate change, the greenhouse gases are the bathwater and the taps are sources of emissions. The first sensible response is to turn the taps off, by reducing our emissions. What does it say about the so-called ‘dismal science’ of economics when economists advocate solutions to climate change akin to building up the sides of an overflowing bath?
The answer lies in the roots of economics. Earlier economists tried to model their art on the natural laws of physics as understood in the 18th century. Since then physicists have moved on, incorporating new views of the world (thermodynamics, quantum mechanics and so on). In contrast, economists have carefully protected their discipline from physical and social reality. Hence, while the rest of us are subject to the laws of nature, many economists peddle a parallel universe where the goal of zero waste is deemed “costly and unachievable” but where arcane instruments like credit default swaps supposedly have value.
Waste itself is mostly an invention of modern economics. In natural ecosystems it does not exist at all. Everything is recycled by one organism for use by another. Contrast this with a famous quote from US economist Victor Lebow:
"Our enormously productive economy demands that we make consumption our way of life………We need things consumed, burned up, worn out, replaced and discarded at an ever-increasing rate".
An earnest child could unpick the flaws in Lebow’s prescription. If economists want to contribute to serious policy debate about sustainability, then they need to better educate themselves on how the world actually works.
Shaun Bowler is a member of the New Zealand Scandinavia Business Association, and is an advisor for The Natural Step, a global organisation whose mission is to accelerate change toward sustainability.