Owen McShane: Dancing to Kyoto tune turns us into an Apec dummy

Environment Minister Pete Hodgson made a passionate case (see link below) for our commitment to the Kyoto Protocol. It would be easy to challenge many of his claims about climate change, but such scientific point-scoring would skirt the real issues.

Our globalising world now contains two major politico-economic communities.

The rich European nations, which have driven the Kyoto Protocol, are suffering serious population and economic decline.

These self-destructing economies have turned their backs on their great past and believe they can solve future problems by destroying wealth and can ensure future safety by denying the fruits of technology.

The Kyoto Protocol will hasten their economic decline unless their governments cheat, as they usually do.

The Europeans' widespread adoption of the precautionary principle, and the consequent rejection of genetic modification and other leading-edge technologies, encourages Europe's scientists to flee to the United States, even to Asia, where they find their knowledge and skills are welcomed rather than feared.

The collapsing markets of Europe invite protectionism and trade barriers. Such markets will offer little room for expansion and fewer buyers of our produce.

On the other hand, on our own side of the globe, we have what I call the aspirational economies of Apec and the Indian sub-continent.

Unlike the self-destructing economies of Europe, these nations are confident of their future and look forward to increasing national wealth and personal prosperity. They believe the best way to deal with future problems, such as climate change, is by increasing their wealth and their access to technology.

Their markets are booming and offer huge opportunities to their neighbouring trading partners, including us.

Apec has 21 members. They account for more than one-third of the world's population, about 60 per cent of world gross domestic product, and about 47 per cent of world trade.

Apec includes some of the largest and fastest-growing economies in the world. These neighbouring aspirational economies are where our opportunities lie.

The Government is convinced that anthropogenic global warming is a major threat, that Kyoto is a workable response, that we must do our duty and accept the costs.

Our strategic approach to energy, transport and economic growth and development is now determined by the protocol. Despite all this, Mr Hodgson believes New Zealand entrepreneurs will rise to the challenge and develop a host of Kyoto-friendly technologies, all exportable to a Kyoto-driven world.

It won't happen.

We are about to incur a host of taxes, levies and incentives, all driven by T-shirt slogans, which are, in turn, driven by junk science and junk economics. Any technologies we develop will address the needs of only those markets suffering similar distortions. We are unlikely to develop anything of use to Europe's nuclear sector or their waste-to-energy plants. We have already rejected both responses to the protocol.

While we test every new technology against Maori animism and European nature-worship, the aspirational markets around us will be developing technologies driven by economic efficiency gains.

They are working on genetic modification of biomass as a fuel. Their approach to waste-to-energy allows them to turn waste from farm and forestry directly into fuel oil. Our definition of renewable energy rejects such impure renewables.

Signing the Kyoto Protocol has made us the Apec outcast. The United States and Australia have refused to ratify the accord. Japan has "accepted" but it is a Clayton's commitment. Russia has signed, but doesn't have to do anything for at least five years. Canada is trying to weasel out of its commitments because it exports so much clean gas to the US.

China, Singapore, Brunei, Hong Kong, Taiwan and South Korea are all classed as developing countries and hence too poor to be expected to sign. So, too, are Chile, Indonesia, Malaysia, Mexico, Papua New Guinea, Peru, the Philippines, Thailand and Vietnam. We are one of the "super rich", unlike such "desperately poor" economies as Singapore and Hong Kong.

New Zealand stands alone as the sole enthusiastic ratifier, determined to do our bit to save the planet. We are dancing to the European tune, claiming virtue from the moral high ground. I suspect our Apec partners regard us as the dumbest clucks on the block.

However, the biggest threat we face is not the monetary cost. The central planners of the 20th century believed that the state should own the means of production, distribution and exchange, an idea that fell out of favour with the fall of the Berlin Wall.

Our central planners have since realised it is cheaper and easier to simply control the means of production, distribution and exchange. The Kyoto Protocol is their perfect vehicle.

Everything we do generates some carbon dioxide somewhere. Hence, the protocol provides every meddler with a lawful excuse to regulate our lives.

Ride a bike, they say. But 40 per cent of the price of the bread which powers our own internal engines is the cost of the fossil fuel used to produce it. So maybe we shouldn't.

The real costs of Kyoto will be our loss of freedoms as we travel down this second road to serfdom.

But I remain optimistic. I cannot believe that New Zealanders will readily succumb to economic serfdom, especially while we watch Australia become ever more attractive to our own youngest, best and brightest.

I only hope we do not take too long to come to our senses.

* Owen McShane is the director of the Centre for Resource Management Studies. He is responding to Environment Minister Pete Hodgson's view that Kyoto offers opportunities to businesses as well as considerable benefits.

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