Put together the greatest challenge of our age, climate change, and the desire in the business community for certainty, and chances are that desire will only ever be partially and inadequately met.

However, chief executives surveyed for the 2018 Mood of the Boardroom broadly agree the Government is "on the right track" with its target of net zero greenhouse gas emissions by 2050 and are willing to believe getting there will deliver significant new business opportunities.

Straight-out climate change denial wasn't tested this year.

At least some of the 11.5 per cent of business leaders who say New Zealand is on the wrong track to a zero carbon economy are criticising the track, not the goal. And more than half, 55 per cent, nominated "right track".


Add in those who think the Government is moving too slowly, a further 10 per cent, and close to two-thirds of those surveyed are on board with current or accelerated action on climate change.

However, there is caution.

Almost a third (30.7 per cent) say the net zero by 2050 target is "too aggressive" and concerns about the way agricultural greenhouse gases are included emerge consistently.

"I think it's on the right track, but we need to be practical also, and give some industries time to adapt," says professional director Cathy Quinn. "Let's not kill good businesses because we have a one-size-fits-all approach."

Some worry about uneven social impacts. Said one agri-business leader: "It's generally on the right track as a vision but the consequences have not been thought through. There will be accelerated social pain in lower socio-economic groups."

One who sees opportunity is the outgoing chief executive of the Auckland-based Employers and Manufacturers Association, Kim Campbell. "The greening of the economy is the greatest business opportunity of this generation, but more clarity is needed," he said, though he frets about the potential to back the wrong technological choices and says we are "years away" from having a plan for transition to a low carbon economy.

Among the sceptics is Roger Partridge, chairman of the New Zealand Initiative business think-tank, who points to NZIER research commissioned for the Ministry of Business, Innovation and Employment that suggests the economy will miss out on between 10 and 22 per cent GDP growth as it adjusts to climate change between now and 2050.

"We need a conversation about whether the benefits to New Zealanders of proceeding at that pace are justified by the cost."


A bob-each-way sentiment emerges in other comments. Many accept change is coming but fear what it might mean. Rare were quotes like this from one entrepreneur: "We need more and faster."

Some certainty should emerge over the next year over the policy regime for New Zealand's attempt, first, to meet its Paris accord commitments by 2030 then shoot for net zero carbon emissions by 2050.

By this time next year:

● A Net Zero Carbon Act should be in law, and with it the establishment of a permanent, independent Climate Commission to advise on and measure policy and progress;
● The Green Investment Fund — a $100 million seed fund — will be up and running. Its launch is just a matter of weeks away now;
● The latest review of the Emissions Trading Scheme (ETS) will have been completed and the current $25 per tonne price cap on New Zealand Units will almost certainly have been raised or removed altogether, along with decisions on auctioning NZUs;
● Rules on international carbon markets and the treatment of forestry for carbon capture should be locked down following the annual global climate change summit, in Poland, in December.

Also far clearer will be whether and how the Government's "billion trees" programme can be achieved in the next decade. There's a good chance some of the recommendations from the Productivity Commission's massive report on achieving a low carbon economy might have been actioned, among them the introduction of so-called "freebates" to push the uptake of electric vehicles while penalising gas-guzzlers, along with a long overdue upgrade to fossil-fuelled vehicle emissions standards.

For heavy transport, bio-fuels may start emerging as an alternative to diesel and there are stirrings of interest in hydrogen as a truck fleet fuel.


Departing KiwiRail chief executive Peter Reidy expects hydrogen-enabled infrastructure to emerge as a new industry in its own right, although one energy industry chief executive is sceptical about new industries fully replacing those displaced by climate change action.

"It will see industries leave New Zealand," he said.

Much will depend on price signals from the carbon market. At $25 a tonne, there is little spur to action. To achieve net zero emissions by 2050, it will need to be between $200 and $250 a tonne, the Productivity Commission estimated.

"Putting a price on carbon means the market will respond," said Thomas Song at Oregon Group, a low-profile Malaysian-owned investor in a range of New Zealand businesses, including forestry group Ernslaw One, its subsidiary Winstone Pulp, and 40.2 per cent of New Zealand King Salmon.

"The emitters will minimise emissions. For example, farmers will plant trees on a slope while farming on flatter country."

Other research suggests the extent of the shift in agricultural practice between now and 2050 is comparable to the shifts in land use seen since the early 1980s, except this time the Government is attempting a managed transition rather than Rogernomics-style shock treatment.


However, that will require the inclusion of agricultural greenhouse gases in the ETS, which in turn will require decisions on whether and how to include methane — a short-lived GHG that accounts for around 35 per cent of all emissions — in the scheme.

The Parliamentary Commissioner for the Environment and the Productivity Commission both want methane included, but say that it should be treated differently from long-lived GHGs like carbon dioxide and nitrous oxide.

Opinion among business leaders is divided. Some 41.9 per cent of CEOs say all gases should be in the ETS, while 23.4 per cent are opposed and another 34.7 per cent are unsure.

Mercury chief executive Fraser Whineray, a fan of action, also questions Climate Change Minister James Shaw's aspiration for New Zealand to become a net zero emissions food producer.

"Where does this come from? Which global customer is asking for this? It feels like the organic food thing — it got a lot of hype but is very much a niche."

Mark Franklin, CEO of Stevenson Group, says the country needs to do better where it can, but action needs to be credible.


"Climate change is a global issue, not local, and if we can do things more efficiently here, then we should. This Government and many of our largest companies are not engaging properly and basically green-washing."