Climate change conference: Thomas Coughlan: Climate could be NZ's 'gilets jaunes' moment

OPINION:

Climate change bedevils politics. It's not unlike a larger, more complicated, green version of the central bank independence debate that vexed democracies in the second half of the last century.

Inflation was wreaking havoc on households and businesses, but what kind of government would give up the right to use its central bank to supercharge economic growth, whenever an election rolled around?

Climate change is a similar issue: it's already laid its clammy grip on developing economies and weather-dependent primary industries - soon (as you're probably sick of hearing) no part of our lives will be untouched by it.

So why are nations - particularly democratic nations - so terrible at responding to such an obvious threat?

Partly, of course, it's a tragedy of the commons problem. It's easy to ignore an issue when its effects are spread unevenly, and where the greatest sinners aren't hit in proportion to their sins.

It's a historical problem too: nations that need to reduce their emissions the most, are quite rightly incensed they will be forced to trade-off hydrocarbon-fuelled economic development against climate ruin, something currently developed nations never had to do.

New Zealand's domestic politics is even more vexed.

Farmers took to their tractors to protest on SH1 earlier this year. Policy-wise, NZ now seems to be at the crossroads. Photo / Michael Craig

The politics of climate change in New Zealand are dominated by a handful of key questions: how fast should domestic emissions fall?; which sectors should reduce their emissions the most?; and who should pay?

The second two questions aren't actually that novel: more or less any economic or environmental regulation asks those two questions.

Climate Change Minister James Shaw has warned that without considering equity and redistribution in climate change policy, governments risk French gilets jaunes-style protests, when goodwill on the part of the French electorate for solving climate change turned into outrage.

The current government is obviously keen to position the country in a place where it can reduce emissions slightly by 2030 (relying on offshore offsets to meet international commitments), and lay the groundwork for a more ambitious march towards net zero in 2050.

The Government's proposed emissions reduction plan is an ad hoc collection of policies that will (hopefully) reduce emissions to meet the 2022-2025 emissions budget.

Rather than using a blunt tool like the Emissions Trading Scheme, the Government would like to equitably encourage individuals towards net-zero lifestyles, using things like EV car subsidies and scrappage schemes and - eventually - the pricing of agricultural emissions.

The most controversial part of the Government's plan for its international emissions commitment relies to a large extent on offsetting high domestic emissions with schemes in other countries.

Shaw says this will cost the Government between $900 million and $1.5 billion a year on current modelling - an $8.1b to $13.5b bill to 2030, in other words.

The question is how and from whom does the Government recover those costs.

One clear funding contender is the ETS: The Government plans to earn between $1.3b and $1.8b a year from the ETS in the next decade, which as of next year will be hypothecated for climate change spending - so one answer is just to spend this money on international offsets.

It has the benefit of ensuring that polluters are in some way responsible for the cost of offsetting those emissions elsewhere.

But this is flawed by the omission of agriculture, New Zealand's most polluting industry from the ETS and all emissions pricing (for now). If the principle is to be that polluters must pay for the cost of climate change, that principle should apply to all polluters.

Likewise, forcing those costs onto the government at large would be unfair - gains of polluters would be privatised, while the costs of that pollution would be socialised.

Back when National had a more coherent climate policy - under onetime climate change spokesman Todd Muller - the party was sceptical of moving "first, fast, and famous".

Howl of a Protest in Whanganui. Photo / Ethan Griffiths

This is part cop-out, and part sense. Large, highly developed economies will likely come up with the intellectual property that will shift the economy towards a zero-emissions future. Those economies will reap the windfall gains that come with that IP.

In the interim, it makes sense to reduce emissions as we're obliged and to bear the cost of offsetting the emissions that can't be reduced.

But governments that use this as an excuse for doing nothing be warned: as the century progresses, the cost of offsetting emissions will increase. It's not unfathomable to see a return of 1970s-style energy security politics: as the cost of offsets heads skywards, economies that don't need those offsets will be at an advantage.

Questions of equity haunt not just the politics of reducing emissions, but also the politics of mitigating climate change's effects.

The Government is progressing work on a managed retreat bill for 2023.

The law will essentially compensate property owners in coastal or low-lying areas vulnerable to climate change so that they can leave their communities and move somewhere else.

But it would be a brave politician to roll out a compensation scheme for some of the wealthiest "victims" of climate change before a comprehensive plan to generate revenue from some of the pollutive perpetrators of the crisis.

That legislation, due in an election year, could be New Zealand's gilets jaunes moment.