Rising to challenges, now

The world has always been changing, but in the last couple hundred years it has changed enormously, and the rate of change is increasing. Somehow we have to adapt to these changes without stuffing up the economy or the planet.

Rod Oram (Newsroom):  Be bold to thrive in a changing world

As it happened, 1980 was also the year we Kiwis began to realise our tried and true economic orthodoxies were failing us. So, we made radical changes in that decade, which helped us prosper in the following two.

This year we must make even bigger decisions about our economy, society, environment and international relations. But the orthodoxies we learnt in the 1980s and 90s continue to largely define our debates today. Thus, we believe some tweaks to business as usual will keep us going.

Yet evidence from around the world shows us the present, let alone the future, is no approximate continuation of the past. Economies are stagnating, politics are polarising, societies are shattering and environments are degrading. Only fundamental changes will turn those around. Any nation failing to respond constructively will be far worse off.

Social change has been pronounced too. We’re less conservative and more ambitious; we’re more ethnically diverse, yet more confident in our ethnicities and our Treaty relationships; and MMP has made our politics more representative and our governments and policies broader-based, and in some ways more effective.

We’ve considerably degraded our ecosystems, as Environment Aotearoa 2015, the Government’s first comprehensive report across land, fresh water, air and marine domains showed us. Many measures continue to deteriorate, subsequent updates confirm.

The world keeps changing. We have little influence on those changes, so New Zealand has to try to adapt to those changes.

Resolving the big debates

Setting us on the right course will take innumerable initiatives by individuals and myriad strategies by organisations, with the help of many key policies by Government. In turn, effective policies are best shaped by rigorous, broad and informed debate involving all the people affected by them.

We need urgent resolution of many of those debates. Here are snapshots of six of them:

Capital gains tax:

Any economy is distorted if one source of wealth generation is favoured over others. In our case, the lack of tax on most capital gains feeds the housing market, starves business investment and disadvantages wage earners.

Fair pay agreements:

Our businesses and their employees need to become far more sophisticated and flexible so they can keep up with, or better, exploit warp-speed changes of business skills, technology and markets. A fair pay agreement is a bottom line in a sector which encourages employers and employees to be ambitious.Good companies and their people will far excel the low bottom line of a fair pay agreement.

Wellbeing budget:

In May our government will announce its first cut at a Wellbeing Budget, based on the Living Standards Framework Treasury has been developing since 2011. There’s a fair measure of support for this from some business leaders.

No doubt, though, this partial and rather simplistic first version will be criticised as being far too complicated, a distraction from pure economic measures, and an unrealistic attempt to measure the unmeasurable.

All good progress is hard.

Zero Carbon Act:

To tackle our monumental challenges of climate change and related aspects of unsustainability we need a very long-term goal for drastically cutting greenhouse gasses, a system for setting interim targets and a way to measure our progress towards them.

My column last week described the unassailable logic of this and the great benefits other countries are reaping from it.

Resource management reforms:

When we passed our Resource Management Act in 1991 it was world-leading for its twin goals of promoting economic development while protecting the environment. Many amendments since have improved it in some respects and hindered it in others. Overall, though, it has failed to adequately deliver on either ambition.

Given our vastly increased economic activity and the resulting escalation of demands we’ve put on our environment in the past almost 30 years, further attempts to modify the RMA simply won’t work.

…we need a fundamental redesign.

Relations with China:

China has changed hugely over the past decade. Its economic scale and technological prowess, and its global influence and sense of power have grown dramatically. Yet, it has become more authoritarian in political and social terms, while reasserting the clout of state-owned or influenced corporates over private enterprises.

Consequently, economic and political tensions between China and the US, EU and many other countries are escalating fast.

Now and for evermore we need to be very clear what our values are and who we share them with; if that causes some slowdown in our growing ties with China that will help us from becoming too dependent on China; that in turn will make us less vulnerable to adverse pressures from it and will help preserve our options and resilience.

The first five sound like a pro-Government manifesto. China is a problem the Government has in part created and has to find a way of dealing with.

Housing is barely touched on under CGT and not even mentioned under the RMA.

Rising to all of the challenges above, and many more, is utterly daunting. If we are so timid as to believe tweaking business as usual will get us there, we’ll fail. But if we boldly embrace the wonderful opportunities for us in this fast-changing world, we’ll succeed.

So if we do what Oram and the Government says they want to do we should be good.

Oram – the crucial methane decision

Rod Oram at Newsroom: The crucial but contentious methane decision

We’ll know by Christmas the salient features of the most important new legislative framework this country will adopt in generations, the Government promises.

Meanwhile, intense lobbying is underway to shape one of the most critical components of it which will significantly determine the legislation’s effectiveness.

The framework is the Zero Carbon Bill, which will set our long-term climate goals – the Government is likely to propose net zero emissions of human-induced greenhouse gases by 2050 – and the mechanisms to guide our policy, technical, economic, political and social responses to achieve that formidable challenge.

The crucial component is how to handle methane. Globally, the gas contributes 28 percent of human-induced climate warming. But it’s a far more intense issue for us.

When, how and by how much we reduce methane will have far ranging impacts on climate and the economy. Simplistically, if we make good decisions, we’ll meet our climate goals, and our agricultural scientists and farmers will contribute to the global challenge of making meat and dairy foods more climate compatible. If we do it badly, we’ll damage our climate and farming reputations, and thus our economy.

At the heart of the methane issue are some still evolving scientific answers to questions about methane’s warming potential and how countries should best handle its reduction.

The debate intensified here in June with the publication of a paper in Climate and Atmospheric Science, a new addition to Nature’s stable of science journals.

Two of the authors were Prof. David Frame, a climate scientist at Victoria University and director of its New Zealand Climate Change Research Institute, and Adrian Macey, a retired diplomat who was NZ’s first Climate Change Ambassador 2006-10, then chair of the UN’s Kyoto climate protocol until 2011. His current roles include an adjunct professorship at the Institute.

Frame, Macey and their colleagues argued that the conventional way of measuring methane’s climate impact was flawed, and that they had devised a better way. Using this new metric, they argued that because methane was short-lived, so was its impact on climate change. Therefore if we stabilised our methane emissions at or slightly below current levels they would contribute no additional warming.

Thus, any policy pressure to reduce methane emissions more steeply should wait until there were proven, cost-effective technologies for farmers to do so. Delaying reductions would not change the methane’s climate impact.

This has encouraged some organisations in the primary sector to renew their calls for agriculture to be excluded from our over-arching climate framework to guide our transition to a low emissions economy, or at least to give agriculture an easy ride in it.

See previous post from Pastoral Farming Climate Research: The issues with methane emissions

Above all, the most important step the Government and all other parties must take is simple: define our 2050 climate target in the Bill and the mechanisms to drive it such as an independent Climate Change Commission.

Then leave the Commission to set five-year, sinking carbon budgets, which will adapt over time to the changing science, technology and economics driving emissions reductions; and to evaluate the success of successive governments’ policies in doing so.

Earlier columns from Oram were on:

 

Working towards a poverty free utopia

Having a fair and equal-ish society is a good ideal to aspire to, but it’s difficult and complicated.

Poverty, and things like health, housing and education inequalities are not just things that money can fix, whether it be Government money used to try to fix problems, or income level;s for individuals and families.

Things like drug and alcohol abuse, family and public violence and sexual abuse are often intergenerational problems that can’t be quickly or easily fixed.

But of course we should try to better – our government should, or society should, our families should.

What is achievable?

Rod Oram at Newsroom: How to solve our paradox of poverty and plenty

Just taking money off people with plenty and giving it to people with relative poverty is not going to work, even if politicians tried  – they keep moving in that direction, but only so far.

Now we have an economy that fails to pay many a reasonable wage or meet their material needs; that is driven by unsustainable debt, production and consumption; that rapidly degrades our ecosystem on which we depend, as documented by Environment Aotearoa 2015, the Government’s first comprehensive evaluation of our ecosystem.

On our current trajectory, all those will get worse. But again, we are not alone. Those are the characteristics of the global economy, albeit we give our own expression to them such as the rapid expansion of dairy farming and international tourism.

In the future, should we choose, we can have an economy that provides a high standard of living in financial and physical terms, in deeply sustainable ways; and we can do so in ways that make sense for who we are as a diverse nation founded on Treaty of Waitangi principles, for the nature of our land and oceans, and for our destiny as a distinctive, tiny country in a teeming world hungry for inspiration and innovation.

Oram is not a politician, nor is he, I presume, someone suffering from significant deprivation or poverty. he’s more of an academic keyboard solution writer – but still worth reading.

Seven big shifts are needed

Raworth lays out seven big shifts we need to make:

  • From defining progress as GDP growth, which is an exceptionally narrow economic metric that excludes social and environmental outcomes, to defining it as “meeting the needs of all within the means of the planet.”
  • From narrowly defining the economy as a self-contained market, to seeing it embedded in, contributing to and dependent on society and the ecosystem.
  • From fixating on the “rational economic man’ to appreciating and responding to the diversity of human behaviours which include inter-dependence, reciprocity, and adaptability to the people and circumstances around us.
  • From simple supply-demand equilibrium in markets to the dynamic complexity of economies, societies and ecosystems.
  • From the flawed hope that growth will reduce inequalities to ensuring all people share in the means of creating wealth and receive their fair share of the rewards.
  • From believing growth will enable us to clean up the mess we’ve made to redesigning our use of natural resources, our products, service and economies so they contribute to the regeneration of the ecosystem.
  • From addiction to endless growth to creating economies that thrive and deliver for people and the planet without necessarily growing.

Many of us Kiwis want to progress, as do billions of other people around the world. We want to be wealthier in all senses of the word, economically, socially, culturally and environmentally. But we know we won’t achieve those reasonable goals by working the way we do now.

In everything we do we need to ask ourselves how do we work with nature not against it?

Working better with nature is just a part of what we need to do.

Poor people tend to concentrate on surviving, getting by day to day as best they they can, and tend to not worry too much about greater ideals.

You can take a poor person to the supermarket, but you can’t make them buy only healthy eco-friendly products with no plastic.

Oram has a number of suggestions about farming, urban design, energy and forestry. He concludes:

We cannot take for granted our urgently needed transformation. It requires us to achieve an unprecedented speed of change, scale of change and complexity of change we have never come within cooee of before. To do so, we have to be a confident, ambitious, learning and inclusive nation so everyone can contribute to and benefit from becoming deeply sustainable.

Sounds ok in theory. Has he got a magic wand?

Changing some things at an unprecedented speed may be good, even necessary, but it won’t be without hardships and adverse effects and unintended consequences.

Above all three attributes are essential to us a nation: common sense of what we need to do, common purpose as to how we will do it, and common wealth from sharing the rewards widely.

I wonder what Oram is doing about it other than writing.

As grand as Jacinda Ardern’s ambitions sound (to some) there is no sign of the current Government coming close to following Oram’s pathway to Utopia.

There is Paradise in New Zealand, but it’s in the remote Dart Valley, beyond Glenorchy at the head of Lake Wakitipu.

https://www.topomap.co.nz/NZTopoMap/nz19517/Paradise/

It won’t be easy getting us all there and living happily together.