The past 12 months have been an interesting journey for me in understanding the impacts of climate change on Aotearoa New Zealand and our Asia-Pacific region.
I have had the opportunity to consider climate change from several different perspectives:
● Considering the future shape and requirements of the advanced manufacturing sector and the need to be carbon neutral to be internationally competitive;
● Helping manage the Cyclone Gabrielle business recovery activity through the Activate Tāmaki Makaurau programme and the EMA;
● Leaning into my role as an ABAC Member representing New Zealand, particularly as a member of the Sustainability workstream, building on the excellent work on climate change and barriers to change of my predecessor Malcolm Johns, Genesis Energy chief executive.
Frankly, it is hard not to feel dismayed and somewhat overwhelmed by the challenges we are facing.
I know there may be some people who still question climate change science, but I think the changes to our planet and the impacts on people are there for us all to see. And I know there are questions for some about prioritising reduction versus adaptation.
I would say we need to do both, and at the heart of these challenges is the need to accept change and innovate our way to a new future.
Apec Climate Leadership Principles
At ABAC we are continuing to advocate for the Apec Climate Leadership Principles:
● Reduction — businesses should play their part in the transition to a low carbon region;
● Adaptation — businesses should support behavioural and technological adaptation;
● Just transition — businesses should seek sustainable and equitable transitions with open rules-based trade.
Our region still has a lot to do on climate change. We have vulnerable neighbours who need our help, too. A just transition demands it.
Greenhouse gas reductions really matter. That means we need to use all the levers available to us, including finally eliminating inefficient fossil fuel subsidies — a commitment our Apec leaders made 14 years ago.
Simply reducing our emissions will not prepare us for the climate impacts we will face even at 1.5C. Adaptation is also vital. Look at the temperatures peaking in the last couple of weeks at over 52C in our region — and from the far corner of the United States on one side, all the way across to China on the other. We need to adapt to new risks, a new way of life and new ways of doing business.
On the other hand, ignoring reductions and only focusing on “adaptation” risks overshooting 1.5C. We are already at 1.1C. With current policies, we are likely to hit 1.5C between 2030 and 2035 according to the World Economic Forum. We must keep the pressure on reductions if we do not want to go catastrophically beyond that level.
Lastly, unless we build “just transitions” into our operating framework, we risk not only falling short of our climate targets, but also our longstanding goals of inclusion, resilience, and a peaceful region.
Climate impacts will hit the most vulnerable in our communities the hardest.
Far from making progress, we are regressing as a region. Compared to 2015, Asia and the Pacific now have more deaths and higher numbers of people affected by climate disasters, as well as higher greenhouse gas emissions.
The Apec region is responsible for 60 per cent of global emissions. What we do in this space really matters.
Innovation is the key — consider China and other partner countries.
What do we need to do is innovate. But one of our challenges as a small economy is that we are typically a technology taker and therefore a price taker from larger economies.
As a major greenhouse gas emitting economy, they might seem an unlikely source of help and innovation for New Zealand. But my observation from three visits to China this year is that they are deeply committed to decarbonisation in their own unique way.
You see examples with their electrified public transport, rail and road, over long and short distances, and with the green number plates of the electric cars, trucks and buses which proliferate in cities like Shanghai.
And there are the new brands of low-cost electric vehicles being launched every month — look out for brands like Little Tiger at new car prices that we can barely imagine today (US$9900).
Decarbonisation is also happening in less public but significant ways in Chinese industry.
This includes innovations to reduce emissions from factories and recycle those to produce food quality Co2 and nitrogen. And containerised battery farms, located in industrial parks, storing solar energy captured on factory roofs, not to mention similar battery farms collecting energy from dedicated solar power arrays stretching across vast tracts of land.
Other solutions that China is exploring, like micro nuclear power stations using thorium rather than uranium as their feedstock, are probably of less interest for a New Zealand context. But it highlights their focus on transitioning to clean energy and lowering emissions, accepting that paradoxically some new coal stations are still being constructed.
The “decarbonisation partnership” between China and New Zealand, announced by Prime Minister Chris Hipkins during the recent mission to China was probably the most significant milestone for the delegation in terms of the potential impact for our country.
We have established decarbonisation as a key priority and competitive imperative for sectors in New Zealand through initiatives like the Advanced Manufacturing Industry Transformation Plan which I co-chair.
What China and other economies like Germany, Denmark, and the UK are striving to achieve in decarbonisation are opportunities for us to leverage through our free trade agreements.
Regardless of who is in government after the October 14 election day, we must pursue these opportunities.
At a business-to-business level this has already started, championed by the EMA and other organisations in the BusinessNZ Network, including the Sustainable Business Network and Business Energy Council.
Government schemes offered through EECA can provide additional financial assistance in these transitions to enable both pace and scale, though there are still opportunities to leverage some of the solutions harder and across adjacent businesses.
New Zealand can invest and innovate too
Not all innovation needs to come from offshore partners. There is a slew of New Zealand companies, small and large, that are leaning into the innovation challenge presented by decarbonisation. Some as major energy users, some from the perspective of science-based invention and entrepreneurs.
Savvy investors like Simplicity, Icehouse Ventures, Punakaiki, and Outset Ventures are backing many of these companies and their inventors. Some of you may have seen the media coverage of Dr Ratu Mataira and his company OpenStar Technologies’ quest to solve the nuclear fusion energy generation challenge. OpenStar iscertainly at the pointy end of innovation challenges.
Fortunately, our research and development eco-system has some amazing capability, and international collaborations across multiple domains, that can positively impact our decarbonisation aspirations.
Companies like Avertana, Mint Innovation, B.spekl, Energy Bank, Zincovery, and Vertus Energy are all examples of applying science-based innovation to create sustainable solutions, following in the footsteps of pioneers like Lanzatech.
Larger established companies like NZ Steel with their electric arc furnace, and Fonterra with replacing their coal boilers, are also adopting new technology solutions to decarbonise, taking advantage of the funding available through EECA and the aspirations of their executive and shareholders to be carbon neutral.
Leveraging our trading partnerships and developing these local solutions can go hand in hand in the innovation journey to decarbonisation and a sustainable economic future.
Continuing to share the opportunities and the business success stories will hopefully inspire an even greater commitment to change.
· Brett O’Riley is chief executive of the EMA and Co-Chair Advanced Manufacturing Industry Transformation Plan.
He also represents New Zealand as a member of the Apec Business Advisory Council (ABAC).