KEY POINTS:
The news today records New Zealand's unemployment at a level lower than it has been for 27 years. Those 27 years contain one of the most thorough and painful periods of social adjustment in the nation's history. Many doubted that an economy exposed to harsh markets could ever employ as many as used to be employed in protected industries. But today the economy employs far more people than it did then, without the inflation and stagnation that was endemic by 1980.
The leap from a controlled economy to a market environment took rare courage. It is clear just how rare when we consider the present Government's response to climate change. If the Government is to be believed, it realises that climate change poses an economic challenge every bit as great as the problems a previous Labour Government faced in the 1980s. This week the world has received another dire warning from the United Nations Intergovernmental Panel on Climate Change: we could face catastrophic temperature increases, more frequent droughts, floods, rising sea levels and loss of much of our coastal amenities unless we start to reduce greenhouse gases in the atmosphere.
The global scale of the problem and the solutions would deter many, including the National Party, from suggesting New Zealand should take the initiative. But that was also true of the stagflation of the 1980s and New Zealand's drastic reforms became widely admired. Again a Labour Government aspires to be an exemplary global citizen but this time its rhetoric is more impressive than its courage.
The Prime Minister has given her Government the aim of rendering the country's growth "carbon neutral" but it remains hesitant on the steps to that end. It has pulled back from a carbon tax and the "fart tax" on methane-emitting farm animals, which cause half of this country's contribution to global greenhouse emissions. It has gone cold on emissions trading after miscalculating the net benefits to New Zealand. Now it has the forestry sector pulling up trees and declining to replant, having discovered it can no longer expect carbon credits to offset a possible charge on felled timber.
The Government's response to climate change is not just feeble, it is in disarray. It has found an easy target in the electricity generating sector, where three of the four main companies are still state-owned. The companies all seem to be considering serious investment in renewable fuels and energy efficiency. But with two-thirds of the country's power already provided by a renewable resource, water, the target is unlikely to impress Kyoto partners.
Strangely, the Government's trepidation persists when most sectors of the economy seem resigned now to an adjustment to climate change. Public opinion appears to have settled on an acceptance that global warming is as serious as the IPCC keeps saying and that something must be done before it gets much worse.
Yet all we have received from the Government is a Minister for Climate Change, and all we hear from the minister, David Parker, are timeless assurances that polices are being developed and announcements can be expected, perhaps by the end of the year.
If the Government finds global warming too hard to handle, it should have the honesty to say so and end the uncertainty facing investment in carbon-emitting activities and alternatives. The longer we continue to receive IPCC reports in a vacuum of action, the more we may wonder whether the foreboding is deeply believed. When peril is real, people act.
