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Home / Business

Matthew Hooton: Climate plan more radical than 1984

Matthew Hooton
By Matthew Hooton
NZ Herald·
4 Feb, 2021 04:00 PM6 mins to read

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Also among the bold steps the recently-formed Climate Change Commission laid out in its just-issued draft advice was an end to coal heating, more forestry, greener homes and a waste-stripping "circular" economy.
Matthew Hooton
Opinion by Matthew Hooton
Matthew Hooton has more than 30 years’ experience in political and corporate strategy, including the National and Act parties.
Learn more

OPINION:

The Climate Change Commission's first package of draft advice would radically change the viability of every business, including yours. It would involve exponentially greater economic and social change than Michael Joseph Savage or Roger Douglas ever dared to dream.

To quote the commission's chairman, professor Rod Carr, its advice, if accepted by Jacinda Ardern, would make the upheaval of the post-1984 economic revolution "look like a trial period".

Yet businesses have just 37 working days to read the hundreds of pages of documents, work out how it will affect their operations and send in their comments before the commission finalises its recommendations in May.

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Whatever it recommends is set to be adopted. This is Ardern's "nuclear-free moment". On Sunday, she declared implementing the commission's advice "one of the most significant pieces of work that this Government will undertake".

And this is just the first step in what the commission says is a programme to change the way every one of us lives our lives.

The commission's report combines the chilling indifference of the most swivel-eyed 1980s Rogernome with the absolute certainty in human analytic ability of the hardest-line Soviet apparatchik.

This is no surprise. Carr was a high priest of New Zealand's free-market revolution and the father of its most extreme measure — Simon Upton's short-lived for-profit Crown Health Enterprises, complete with cash registers in public hospitals.

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Rod Carr and his commission have set out emissions-reduction proposals in excruciating detail. Photo / Supplied
Rod Carr and his commission have set out emissions-reduction proposals in excruciating detail. Photo / Supplied

Give Carr a ready-made ideology, whether written by Friedrich Hayek or Arne Naess, and he undoubtedly has the intellectual capacity to drive it to its logical end. Whether the good professor has ever developed wisdom is a separate question.

Upton, now Parliamentary Commissioner for the Environment, has always displayed similar fervour, making the same transition from free-market radical to deep-green mandarin.

The commission's draft advice goes well beyond the relative humility of the UN's Intergovernmental Panel on Climate Change, the architects of the Kyoto Protocol or the designers of the world's emissions trading schemes (ETSs).

Each saw climate change as an urgent and existential threat but recognised that a complete solution lies beyond the comprehension of any human mind or committee.

Their strategy was for governments to place sinking lids on net emissions and use markets to price the greenhouse effects of every activity, so the worst emitters would soon become uneconomic while the best and fastest ways to reach net zero would get financial support.

Adopted globally, an ETS would be guaranteed to deliver net zero emissions if politicians stopped meddling in the market, let the carbon price rise to the necessary level and desisted from protecting those emitters with the best lobbyists.

The climate plan is Jacinda Ardern's "nuclear-free moment". Photo / Mark Mitchell
The climate plan is Jacinda Ardern's "nuclear-free moment". Photo / Mark Mitchell

That is not the commission's view. It believes allowing the market to accurately price carbon would lead to the wrong businesses being opened or closed by the wrong people at the wrong time and in the wrong place.

For example, it worries the wrong number and species of trees could be planted in the wrong communities, attracting the wrong birds. It wants itself and Ardern's ministers to make much more fine-grained decisions about each industry and business.

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Three five-year plans are outlined, from now until 2025, then to 2030 and 2035. These don't just set a sinking lid towards net zero emissions by 2050 and allow the ETS to price how best to get there. Instead, for every greenhouse gas, the commission outlines exactly the reductions it wants with a Khrushchevian exactitude that would be terrifying were it not so absurd.

Thus, for example, emissions of non-biogenic methane should fall by 8.0 per cent by 2025, 39.0 per cent by 2030, and 56.1 per cent by 2035. The percentages are different for biogenic methane, which should fall by 6.5, 11.4 and 15.9 per cent respectively. And so on, for every gas.

But this is not all. For each major industry, the commission tells us how. For example, 8 per cent of heavy trucks should be electric by 2030 and 69 per cent by 2035. It's different for medium trucks and light vehicles. The average efficiency of light internal combustion engines will improve by 1 per cent each year and average household travel distances drop by 7 per cent by 2030.

For existing homes, the plan relies on energy intensity improving by 6 per cent by 2035. For commercial property it's 30 per cent. The total amount of organic waste going to landfills should fall by 23 per cent by 2030. Farm herds would fall by 15 per cent by 2030, assuming selective breeding reduces biogenic methane emissions by 1.5 per cent by the same year. From 2025, 2000 hectares of dairy land would be converted to horticulture annually. And on and on it goes.

But that is still not all. The commission says bluntly that some businesses will need to be closed, but says the benefits of climate action must be shared across society, and for the costs not to fall unfairly on certain groups of people.

To achieve this, it says we must consider the connectivity between "the material and non-material", between "the people, the land, the atmosphere and the oceans" and indeed "the connectedness of all things, including the past, present and future". It claims to have in fact taken all this into account when setting budgets for each gas and advice for each industry.

No human mind can do this, as understood by everyone but fanatics. About the only insight the commission does not claim to possess is the extent to which Ardern adopting its recommendations would motivate China, the US, India and Russia to follow in our wake, plus our own club of sub-0.2 per cent emitters. Such an assessment would surely be of use.

In the meantime, Carr might be better to accept the limitations of any individual mind, and move back somewhat — not all the way to taxing the sick! — to his old belief in using prices to gather information and markets to make decisions.

The Soviet economics he seems to have adopted more recently has a record unparalleled in history, not just of causing unnecessary disruption and incalculable costs, but of delivering everything except the outcome the policy-maker intended. There's only 37 working days to tell him so.

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