Business leaders call on new Government to 'open its eyes' and create a climate commission legacy

Rod Oram reports in his column this week on a growing mood at the top levels of New Zealand's business community for any new Government to create a climate commission and take sustainability seriously. Those calling for change include Air New Zealand's Christopher Luxon and Sir Rob Fenwick.

Last Wednesday week, Air New Zealand laid on a big breakfast for 400 business people – enough to fill more than one of its Dreamliners – at the cavernous Viaduct Events Centre in Auckland.

The event – longer than a flight to Wellington and back – was not to celebrate a new aircraft, bumper profits or other conventional business milestone. It was for the launch of the airline’s 2017 sustainability report.

Christopher Luxon, its chief executive, told the audience the company had its priorities right.

“Two years ago, I launched Air New Zealand’s sustainability framework to supercharge Air New Zealand’s success -- socially, economically and environmentally.”

Given aircraft burn prodigious quantities of climate-changing fossil fuels, that could seem an oxymoron. Yet, member nations of the International Civil Aviation Organization, a UN body, committed last year to phasing in carbon neutral growth of their activities from 2020.

That means their airlines will continue to grow, but net emissions from aircraft will be flat, thanks to fuel efficiencies, carbon offsets from the likes of forest plantings and, ultimately, technology breakthroughs such as synthetic fuels and hybrid and electric planes.

This is the sort of radical change that our Productivity Commission is investigating in its inquiry into New Zealand’s transformation to a low-emissions economy. In its issues paper released in August it says:

“…the shift from the old economy to a new, low-emissions economy will be profound and widespread, transforming land use, the energy system, production methods and technology, regulatory frameworks and institutions, and business and political culture.”

So far, the Commission has received more than 120 submissions from interested parties. Many from mainstream businesses call for bold and co-ordinated policies from government to help them play their part in a more sustainable economy over the next couple of decades.

But it’s very early days. So far, only a small group of New Zealand corporates such as Air NZ, Z Energy and Sanford are gaining multiple benefits from integrating economic, environmental, social and cultural sustainability into their businesses. Meanwhile, Air NZ is recognised internationally as an aviation leader in carbon reduction.

Integration is obvious to Air NZ, since the country’s culture and environment are the prime attractions for the passengers it flies in from around the world. It makes the case for this, and its progress on the journey, in its sustainability report.

Yet, all New Zealanders – people and companies – would be better off from achieving deep sustainability.

Sir Rob Fenwick, the environmental and business leader who is a member of Air NZ’s sustainability advisory panel, made an impassioned pitch for this at the airline’s event.

He said we’re destroying our natural capital because we treat polluted rivers, climate change, biodiversity loss and other environmental damage as separate issues. As a result, our economy and ecosystem is less resilient, and we’re all the poorer for it.

“This stuff sustains the New Zealand economy, and it’s all under pressure,” he said. Thus, there is a very urgent need for government, business and civil society to work together in an integrated way.

The same pre-occupations were apparent this past week at the annual Climate Change and Business conference organised by the Environment Defence Society and well attended by businesses.

The central theme was: almost all sectors of the economy contribute to greenhouse gas emissions and thus to climate change; all sectors of society will suffer from the impact of climate change; and yet, all sectors of society can contribute to the transition to a low-carbon economy, and thus benefit from economic, environmental and social sustainability.

While significant changes in government policies are needed to help shape society’s efforts to tackle climate change, one innovation is seen by many as essential to the process.

'Create a climate commission'

This is the creation of an independent parliamentary commission or committee to set long-term carbon reduction goals and a series of, say, five-year carbon budgets to achieve them over the next three or more decades. The committee would also regularly review government policies designed to meet the budgets, and their progress towards doing so.

This was unanimously endorsed by conference delegates.

The UK pioneered such legislation in 2008 with all-party support, a move followed by some 20 national and regional jurisdictions around the world. This mechanism helped the UK cut its emissions by 23 percent 2008 to 2015, while ours rose by 21 percent.

Generation Zero, the thoughtful and effective advocacy group of young people who are determined to be the first generation to achieve zero emissions, are campaigning for similar legislation here.

Earlier this year, Lord Deben , one of the architects of the UK legislation and the current chair of its climate commission, was invited to New Zealand by the BlueGreens, the environmental caucus of the National Party. While many of its MPs are keen for New Zealand to benefit from such a commission, there is strong opposition from some of their parliamentary leaders, particularly Steven Joyce, Gerry Brownlee and Bill English.

Apart from National and the one-MP ACT party, all other parties called for a climate commission in their election manifestos. It is also supported by Jan Wright, the out-going Parliamentary Commissioner for the Environment, and a growing number of major corporates such as Air NZ, Z Energy, Westpac and Contact Energy. Anthony Healy, CEO of BNZ, added the bank’s support this week in this Newsroom interview.

The EDS conference was also notable for the state-of-play within government departments on climate change. They reported a fair few working parties and efforts to co-ordinate those with the likes of the “transition hub” the Ministry for the Environment is working on.

However, civil servants, at least judging by some of their public comments at the conference, are still thinking mainly of the cost of transition to a low-emissions economy and not the benefits. Clearly, the aversion of the out-going National-led government to rising to these opportunities and challenges has deadened their thinking.

For example, it would be “very challenging and economically damaging” to meet our Paris climate change commitment by relying entirely on domestic reductions in our emissions, an MfE official told the conference. Thus, she added, we had to buy in a significant volume of international credits because those could achieve reductions at half the cost of domestic reductions.

Investing in other countries carbon transitions

The cost could be up to $14bn, officials’ advised Judith Collins when she became energy and resources minister in the out-going government. The illogicality of investing in other economies’ transition to clean technology rather than our own seemed lost on them.

Fortunately, a more constructive dialogue is underway in a series of workshops organised by business and involving some 30 leaders from the private and public sectors. However, their success will very much hinge on which party leads the next government.

A Labour-led collation involving NZ First and the Greens would have some advantages but some disadvantages. All three parties, for example, support a climate commission, but they have policy differences on many other environmental issues.

Moreover, it would be a new government coming to grips with power and a raft of urgent issues across the economy and society; in addition, Winston Peters is scathing of the Greens, and generally evermore irascible.

A National-led government would have to approach this fourth term with energy and an appetite for a fundamental change in its thinking. It would need to respond to the leading edge of business which sees rapid environmental progress as an economic benefit rather than a cost. That’s a very big ask of National, and complicated by Winston Peter’s contradictory views on the issues, and his increasing belligerence.

'Open your eyes to create a legacy'

Yet, Fenwick, who helped found National’s BlueGreens caucus in the 1990s, has a very clear message to National:

“This will be a very critical term for the centre-right. If they ignore the election noise on the environment, which was louder than the 1972 election when the issue was Lake Manapouri, there will be a lot of anger,” he told Newsroom.

“If they want their fourth term to be a legacy one, they will need to open their eyes and take their lead from the public.”