Our land, our environment and our economy – transiting to where?

Gareth MorganEnvironment

Still 100% pure?

The following is a speech of mine recorded at Te Papa by Radio NZ.   For those that like to listen rather than read, you can click play below.

The age of economic prosperity has delivered a great deal, however New Zealanders’ expectations of material wealth continue to rise. Can we be satiated or is the despoiling of our land and environment an inevitable precondition before our priorities change from consumerism to well-being?

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We live in times of great prosperity – at least measured via conventional means such as GDP or national income per capita. For example on this measure, current income per head is three times what it was fifty years ago in 1960, or 15 times what it was 100 years ago.  Progress for sure.  Yet comparatively, on pure per capita income basis we’re down to about 30th in the world, having been steadily overtaken on that measure by other countries over recent decades.

Despite that lowly GDP or income per capita ranking, on the Human Development Index – which in addition to income includes life expectancy, health and knowledge we’re 3rd.

If it’s income or wealth disparity that alarms you then know that we are the 6th most stark developed country in terms of income inequality. The gap between rich and poor is only greater in Hong Kong, Singapore, the US, Israel and Portugal.

On the inter-generationally measured Happy Planet Index, which measures happy life years per ecological footprint we slip to 28th in the rankings. South American and Caribbean people live the longest, happiest, and most sustainable lives. We lose because of the resource & environmental depletion of the stuff we produce, consume and export. The UK is the best of Europe at 41st, punished because it would take 3 planets of known resources at current technology to provide everyone with that income.

SO IN SUMMARY – we remain a developed country, but have slipped from 5th highest per capita incomes in the 1960’s to 30th despite a threefold increase over that time. But income isn’t everything and if we include health, life expectancy & knowledge we’re 3rd, albeit the 6th worst in terms of income disparity having shown the greatest deterioration of all developed countries on that dispersion. And finally if you take account of the damage we’re doing to our part of the planet in order to maintain our model of social and economic well-being we are 28th. The finger can be pointed at us as well-off, environmental pariahs clinging to resource-depleting practices and failures at the transition to sustainable economic development.

Against this backdrop just what is “100% Pure New Zealand” supposed to mean?

  • This brand dreamt up by Saatchis and adopted by the NZ Tourism Board 13 years ago in 1999 was a response to the hitherto fragmented marketing of NZ as a destination. It is rapidly however turning into an embarrassment. It doesn’t take much intelligence to see that it simply doesn’t line up against what we’re doing to our environment.
  • Our economy boasts the 5th highest per capita carbon emissions in the 34 member OECD, we’ve always been high, there is no evidence of any transition from that;
  • According to the Commissioner of the Environment NZ is on track for emissions by 2020 of 30% above 1990 levels, despite making an international commitment at Copenhagen to reduce them by at least 10% by that time.
  • The government is subsidizing carbon intensive industries to both protect them from the ETS and to try and shut down the economic chasm with Australia that has opened up as a result of accelerating mineral extraction in that country. This is the dilemma.


Actions speak louder than words and our hypocrisy is making even the most blindly patriotic, NZ-promoting agencies squirm now. According to the NZ Tourism Board these revelations re the assault we’re inflicting on our environment now require “100% Pure” to become an aspirational goal. When that Board launched the boast in 1999 it actually believed it.

Sadly 100% Pure is becoming more harmful than a vacuous jingle. We need to do much more if “100% Pure” is not turn out to be the petard that turns a foreign perception to derision and even tourist desertion. Greenwash is a term increasingly being used to describe the NZ reality;

Last year, BBC’s HARDtalk commented that New Zealand is clearly not 100% Pure, citing that half of New Zealand lakes and 90% of our lowland rivers are polluted.

[quote style=”1″]We believe that we have a clean economy and a clean green image, and do not see the lack of honesty which surrounds this branding. We are merely a small population spread over a large area which provides an impression of clean and green -Paul Callaghan, 2009 [/quote]

Thankfully the pressure on the government to abandon environmental hypocrisy is building;

The recent spat between Stephen Joyce, Minister of Economic Development and Pure Advantage, a grouping of some NZ business leaders who have made a commitment to “Green Growth”, is a cameo of Kiwi environmental contradiction. The government just last year extended assistance to emitters – retaining the right to further delay agriculture’s entry to the ETS from 2014 if technologies don’t exist by then to reduce agricultural emissions and/or if competitors aren’t taking action; it is slowing the phase-out of the two-for-one deal on credits; and it is extending the $25 fixed price for credits a further 2 years and maintaining the right to further delay the recommended $5 pa price rise for those.

Taken together you can see that we are resisting as much as possible the actions necessary to make the government’s declaration at Copenhagen to reduce emissions by at least 10% from 1990 levels

Pure Advantage has noted this by pointing out that relying upon mitigating the damage from our fossil fuel-based economy is likely to fail; rather, developing green growth or cleantech industries will be needed. Further it says that both State and private funding, as well as regulation, needs to be used. The group feels the private market alone won’t pull it off.

The Minister is obviously feeling the burden of being caught in the middle between emitters resisting change, and environmentalists and conservationists calling for it. This happy meal from Pure Advantage of subsidy, regulation and intervention was too much for him to imbibe. He lashed out accusing the group of calling for subsidies for their pet projects.

What the Minister conveniently ignores however is that we’re already digesting a Combo of State and private funding, regulation & other interventions to protect the competitive advantage from our fossil-fuel intensive, environmentally degrading status quo. Proposing that those measures be redirected is the Pure Advantage argument.

Of course the concern is that such a change will drive our incomes down, that the cost of transition will outweigh the benefits. We know we have built our economy on carbon-intense, environmentally degrading, resource-depleting industries – guilty as charged.

Last time we tried to change the NZ economy was under Rogernomics, removing agricultural subsidies, dropping protection of domestic manufacturing and assuming that an explosion of new globally competitive niche knowledge industries would result, we failed. Rather we saw a strengthening of the competitive position of primary industries and those related. It is these that still provide the global income we like to spend – or at least a good dollop of it, entrenched borrowing provides the rest – but that’s another story.

How fanciful then is the cleantech vision as the silver bullet for New Zealand? To purport it as anything more than part of the mix, would be pure speculation.

But does that mean that economic growth and environmental sustainability for us are actually incompatible? Does sustainability imply such a drastic change for an economy built on carbon-intensive industries and resource extraction that there is not a chance in hell that our international commitments will be met? Yes we are the 5th most carbon-intensive economy in the OECD, and if we add to that the environmental degradation from land- and water-intensive industries like dairying, forestry and mining, it doesn’t take long before you appreciate the mountain NZ has to climb to meet its environmental and emissions goals. It’s not impossible but it is a mountain.

Rather than seek a silver bullet through Greentech alone, more realistically NZ will have to pursue a combination of

  • Emission mitigations of existing production processes,
  • Policies and practices that encourage environmental improvement, and
  • Greentech.

None of these come cheaply – ask a farmer what it actually costs for them to mitigate the environmental impact of their activity – nutrient recycling technologies for instance don’t come cheap.

The argument however is that we’re not even sipping this mixed cocktail of measures anywhere near fast enough, that in fact we are resisting change – or at least the political process is – and as a consequence, we’re failing.

And the gains don’t always come from where you expect, so the message here is (a) change direction and take this issue seriously but (b) stay open-minded, resist cargo-cult temptations to panic about change or be duped by unproven new technologies, we must assess the evidence, make our calls and above all, act. For example

  • Over the last 5 years it’s been the US that has had the greatest drop in carbon emissions (450 m tons) brought about by a switch to burning gas (half the carbon emissions) rather than oil. Europe – replete with its Kyoto commitments – has raised its C emissions despite recession, due to the European price of gas going up. US achieved its fall by expanding the practice of fracking – same as Australia is looking at with the gas on its east coast states. And our perception? It’s evil.
  • 95% of the area of NZ is under the sea. Are we really serious when we say we should not tap the mineral resources in that area? Assuming more oil and gas is discovered then a proper cost/benefit analysis is most unlikely to suggest New Zealanders should deny themselves of this income. A rational response that is evidence-based would hold yes there is potential there.

But the overall tenor of the current predicament then is of the need for greater urgency to align environmental protection with economic and social progress. We’re cruising, not really caring to change our carbon-intense, resource-exploiting ways – and no doubt this is where the politicians are feeling the heat. Bold moves are not the currency of comfortable and long political tenure.

Quite aside from the policy side there is no doubt that industry and consumers are changing their practices that impart environmental damage and/or expand their carbon footprint. Whether it is the construction, airline, agricultural production, manufacturing or services sector more and more of us see merit in pursing and being seen to pursue carbon-lite, or environmental-enhancing practices. But lest our self-congratulation on these anecdotal trends seduce us, don’t forget our emissions are growing, our biodiversity decreasing, rates of species extinctions hitting new peaks, and environmental degradation getting worse.

There was a time NZ was tops in Environmental Performance as per the UN Millennium Goals, we now sit at 14th, while successive OECD reports demonstrate declining performance in environmental monitoring, emissions, water quality and allocation.

Let’s just look at one example of an industry making advances in some regards but overall looking pretty bad for us. I hope it illustrates the dilemma we face. Dairying – is in the gun for emissions of methane as well as degradation of waterways, yet improvements are forthcoming. Over the last 20 years there has been a 15% reduction in emissions per kg of milksolids. The problem of course is that the number of cows has risen and the overall volume of milksolids with that.

The consequent doubling of emissions from this major sector, illustrates the consequences of success. Breeding for more milksolids per cow, or per burp is all good but in reality it hasn’t got a hope of offsetting the growth in emissions coming bigger national herd. For now other New Zealanders are paying for this trend, or subsidizing the protection of the dairy industry – as it remains outside the ETS.

If only 30 years ago when the nonsense of maximizing the herd count as the best way to maximize the industry’s profitability was exposed as a farce, had we been delivered better leadership in that sector and recognized that profit-maximising for the industry involved more off-farm investment – processing, product development and distribution. But it’s taken until last week for the TAF regime and its associated capital-raising facility to emerge so the industry will at last be able to invest more off-farm.

Ironically it’s this that presents the brightest hope of taming the industry’s emissions trajectory. In the interim we’ve had this bizarre outcome of more and more cows. At this rate building farms on the side of the Southern Alps is rational.  And contrary to the scaremongers under, TAF the farmers don’t lose control of their industry. Why oh why are we so slow to do the right thing?

The other aspect of dairying of course is the degradation of, and the volume take-off from our waterways. Rather than face a user-pays regime both of these have for too long been the burden for ratepayers and taxpayers. Effectively a subsidy for the sector.

Having noted this, it is the case of course that the majority of dairy farmers remain mums and dads and their preferences for environmental protection and enhancement are as strong as anyone’s. This has seen a trend improvement in reducing waterway contamination, in line with the general mainstreaming of conservation values over the years. This behavior is encouraged of course by stricter and stricter sanctions from Local Councils. But water take-off by intensive farming remains a problem with local authorities’ rationing of it an imperfect way to represent the interests of the public.

So just using this one example, what’s the solution – to crimp the growth of that industry? Absolutely not, but there have to be offsets. We need to both be sure that dairying’s advance isn’t a false signal – effectively being paid for by a heavy sacrifice from other New Zealanders, present and future, and secondly for each resource-intensive, environmentally-degrading activity, we need offsets in the forms of others that are renewable and environmentally-enhancing.

The NZ balance sheet simply tells us we are in environmental and carbon deficit and those deficits are getting larger. Yes there could be a technological windfall that lands in our laps and saves us all from having to think – but that’s a long shot, and international tolerance of such a gamble – in the form of sustained tourism and foreign consumer accreditation of our products – cannot be expected to be infinite.

There have been big step changes in the conservation or environmental space that have raised the behavioral norms before – the QMS was one. We need and we are undertaking more, some contemporary examples are;

  • The ocean is open to all (which means it gets trashed by all) and consents are allocated on a first come first served basis. There is no way for ocean space to be traded so that it is used for its highest good. All ocean users oppose protection mechanisms so we are left with 0.4% of our ocean in marine reserves. Ocean users make no contribution to looking after the ocean, so it continues to degrade. We need to zone the ocean, allocate space (including setting up marine reserves) and allow tradable rights between users. If these uses really have an economic benefit then they should be able to pay rates, so we can look after the ocean and compensate those who have lost out from zoning (e.g. lobster fishers from setting up marine reserves). Closing the commons comes at a cost, but we have to face that otherwise our heavily used ocean areas will start collapsing.
  • MPAs – these are not just a measure to protect the marine environment but the evidence tells us they enhance the fishing for tens of kms from their boundary. We know adults in reserves have twice the biomass, a larger size, and greater fecundity with over half of the offspring being exported to fished areas. It’s a no brainer, those recreational and commercial fishing lobbyists who oppose them are amusingly getting tangled in the lines of their own arguments. For the sake of the resilience of our marine life we need to lift our MPA’s from 0.4% of our EEZ to 10% of our EEZ – and the spatial distribution matters. At government level the problem is the Minister of Fisheries who is too much under the influence of the myopic fishing industry and recreational short-termism rather than predicating his decisions on a whole of ecology, science-based approach to the economics of fishing.
  • Internal waterways – at the moment consents are on a first-come first-served basis, and most parts of the country only penalise the most blatant discharge of nutrients into rivers. The environment is getting trashed, and it isn’t producing the best economic results either because there is no way for water users to trade. We should look at a system which allocates water rights as a % of the available flow above a set environmental level. We also need to set nutrient limits in catchments and could use nutrient markets as a way to work out the best way to change production so those limits are met.

Quite apart from the scope for policy providing some brake on environmental destruction there do exist steps we individually and as communities can take to both satisfy our desire for a better environment for ourselves and our progeny, as well as to offset the reputational damage our government’s hollow undertakings of recent years threaten

  • A predator-free NZ – this is yet another big picture ambition that would, in the words of Sir Paul Callaghan, make NZ a place where talent wants to live
  • The Te Awaroa project – a science-based project to working with foresters, farmers and communities to bring back bush buffers to all of NZ’s rivers and waterways – 1,000 rivers in a 100 years is the cry
  • Restricting our buying to consumer accredited products only that carry the marks of environmental sustainability
  • The mainstreaming of conservationism and its integration into the daily lives and decisions of New Zealanders

In conclusion, yes we have raised our standard of living enormously and yes it is clear the environmental damage has been considerable, but there is a burgeoning desire to pay far more heed to the health not just of our immediate surroundings but of the planet as a whole. That requires courage, risk-taking and a preparedness to change direction. The politicians can only move as fast as we are prepared to show resolve. There’s the challenge for us.

This is the second speech I’ve made in as many weeks on the subject of conservation and the sustainability of New Zealand’s economic future. In the first – a keynote at Forest and Bird’s annual conference, I called for recognition that conservation and ecological sustainability is a mainstream issue, no longer the preserve of a narrow sector of interest. That implies that the Green Party needs to ensure that it can form a coalition with either the centre-left of or the centre-right of NZ politics.

Sadly it remains of the view that the economic policies of National are too right wing to be contemplated. Given that in NZ the politics of both National and Labour would, according to NY Times columnist Thomas Friedman, fit within the gambit of the US Democratic Party, it seems unreasonable of the Greens to suggest National is too right wing for conservation issues, it is just not a tenable position and is a significant reason why many centre NZ voters find the Greens too difficult to stomach. That is a real loss because those voters have an affinity for conservation and environmental sustainability, but not at the cost of economic credibility.

Tonight I have focused on the other side of the political spectrum and highlighted the difference between the actions of National on sustainability and the rhetoric it trots out on the international stage. It is a dangerous contradiction for New Zealand to sustain, and one that paints us into a corner of being a carbon-intensive society that pays lip service to sustainability while subsidizing the activities of emitters, stepping up resource exploitation, underwriting increased income and wealth disparities and all the while, slipping down the league tables of economic performance.

The mainstream of New Zealand I suggest is crying out: give us a suite of green growth policies that are credible, restore the egalitarianism that is the NZ legacy, and make NZ a place, as Sir Paul said, where talent wants to live. Come on.

Our land, our environment and our economy – transiting to where? was last modified: December 15th, 2015 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.