The Cost of Being Green
Click for big version
Al Gore’s climate change made saving the planet look like such a cool lifestyle option – but the bills have now begun to arrive, and that’s taking some of the sheen off being green. Oil prices, as the Greens predicted, have gone through the roof. The cost of our Kyoto commitments has been estimated at half a billion (if you believe the Environment Ministry) one billion ( ditto Treasury) or some catastrophic number beyond, by sundry other sources. Everyone still wants to save the planet….but in election year, no-one really wants to pick up the tab. Can’t we just put it on Visa, and pay by installments?
It was bound to happen. The economic costs of being meaningfully green would someday need to be put on the table – where they would have to compete with health, education and every other call on government finances. None of which makes environmentalism any less necessary….but it does make it less politically attractive, Most parties, as a result, prefer to present being green as a fairly painless option.
The Greens response? Right now, they are having to prove that they’ve got (a) robust solutions that keep them ahead of every other party now talking the green talk, and (b) can deliver these solutions without breaking the bank or wrecking the export economy. Politically, the Greens have been left trying to shore up and improve government initiatives – first the Electoral Finance Act, then the Emissions Trading Scheme – that while necessary in theory, have been electoral liabilities in practice..
In the process, the Greens have at times looked uncomfortably like an unpopular government’s fellow traveler and apologist. To put much needed daylight between itself and Labour – and in the process, to stiffen Labour’s backbone – the Greens have overtly and covertly flirted with maybe, possibly, entertaining some sort of vague and enabling liaison with a victorious National-led government.
So far, that bluff has not looked a particularly convincing one . Mainly because everyone knows that if the flirting ever did go beyond a ‘treat ‘em mean / keep ‘em keen’ gambit aimed primarily at the Beehive ninth floor, then the Greens own core supporters would likely revolt, en masse.
True, a Blue-green vote exists out there. Currently however, it seems smaller than the pool of soft and dispirited Labour supporters the Greens can hope to attract this year, especially if National continues to dominate the polls. Which is why even a whiff of the Greens propping up a centre right arrangement – no matter what environmental gains it won in post election negotiations by doing so – is likely to kill off the party’s golden opportunity this year to make the most of its core identity. Which to the outside world at least, is as an environmental party of the centre left, and not as John Key’s long lost hippie cousins.
So, ironically, the best way of eventually raiding Labour will be to endorse it. The Greens would probably like that decision to be theirs to announce during say, the final stretch of the election campaign, but that’s wishful thinking. Soon after its AGM in June, expect the Greens to make a very grudging, finger wagging tilt towards Labour, warts and all. Last Friday, Gordon Campbell talked about the costs and benefits of being Green with the party’s Co-Leader Russel Norman.
Click for big version
Campbell: – At the end of the first Kyoto period, what will be the likely cost of the bill New Zealand faces ?
Norman: The government’s latest re-calculation is half a million dollars.
Campbell: Do you buy that?
Norman: They haven’t released the detail numbers underneath it. For the one billion estimate, we’ve got the details but when they’ve revalued it, we haven’t got the details.
Campbell: So right now, what’s your working figure?
Norman: Well, we’re using the old figures and the new figures until we can actually look at what they’ve got. We can look at some of the projections, and I’ve just calculated the agricultural projections and looked at some of the changes they’ve made. My estimation is the cost of the agricultural projections has gone up very significantly.
Campbell: I’m trying to establish what figure you are going to going to go out with on the election campaign and say -= this is what the Kyoto process is likely to cost you. But you seem reliant on government figures that keep on changing.
Norman: All the time.
Campbell: So what do the Greens think is a realistic price per ton for carbon?
Norman: I think $30 per ton is realistic for the moment. But its highly likely it will go up. Its an international market, and there are no guarantees around it.
Campbell: At the moment the cost of the first part of Kyoto 1 is either half a billion or double that. By paying whichever it is, by how much will we reduce global warming?
Norman: Our emissions are obviously a small part of the emissions, so we’re a small player. The true role for New Zsdaland is in contributing to a global system. And even the entire Kyoto system if everyone meets their targets, it won’t make a massive contribution at all. It’s the first step. What makes Kyoto important is establishing a system. And that’s the danger. If Kyoto goes down, we can’t make it better.
Campbell: Given the contribution New Zealand taxpayers will in all likelihood be making, you’re saying it won’t affect the rate of global warming…would it say, make a 1 per cent difference ?
Norman: No, it won’t make anything like 1 per cent. We’re only O.2 percent of all emissions globally. The two things that are difficult about this is one, the time lags involved and two, that it requires global co-operation – and the Kyoto system is the first step towards global co-operation.
Campbell: Politically, do you see the difficulty in asking New Zealand families and households to pay half a billion at best into this, or three or four times that figure at worst? For something that will make precious little difference if any to the fate of the planet and whose main effect will be to foster global co-operation?
Norman: Well, I don’t accept your premises. I don’t think New Zealand households should pay. I think the polluters should pay. And the prime polluter that is getting off is the agriculture sector. Dairy should pay its share.
Campbell: Ideally. But agriculture’s free ride on the ETS has to a large extent, been kicked out to 2018. Power companies are out until 2010, transport until 2011. Realistically it is going to be the taxpayer – and when this is put up alongside the needs in education n and health, why should it prevail?
Norman: Well, our view is very simple. It is that the polluter should pay. All we can do as a party is have a policy that is coherent. We think making the polluter pay is coherent. And try as hard as possible to get that policy implemented. Its very difficult because Labour and National are backsliding. But if agriculture is brought into that system, the taxpayer won’t end up forking pover all that money.
Campbell: And even though agriculture will not be paying its way on current plans, you ‘re still advocating as a party that New Zealand should live up to our Kyoto commitments and pay that bill regardless?
Norman: : Yeah. Even though we think it is a ridiculous way of doing it, by subsidizing the polluters. But yes. Because the alternative is the unraveling of an international system which is our only hope to save ourselves from human caused climate change.
Campbell: : Fine. But tell me again, why should that goal prevail over the health and education needs that currently exist in New Zealand?
Norman: I don’t think it should prevail. I think we can do both.
Campbell: We can pay a half billion or double that and still have enough left over to meet our health and education needs?
Norman: I think agriculture should pay, so that we don’t have to make that choice. I can’t make Labour and National do it, because they’re so pathetic, but that’s what we should do.
Campbell: If we leave Kyoto and look at the emissions trading scheme. It will now exempt energy companies and transport for longer, and give exporters and farmers another 22 years before subsidies are finally phased out – so, is such a system really worth the candle?
Norman: In terms of the ETS and the latest changes, that’s a decision we haven’t made yet. We’re going to look at what comes out of select committee, and decide whether we are going to vote for a second reading or not. It’s a fair question. Given how much it has been watered down…is it worth having it at all ?
Campbell: So what extra would it take for the Greens to pull their support?
Norman: : We’re going to have to look at the net environmental gains. And the fairness of the costs.
Campbell: When you look the political numbers, what is the most likely party configuration that will enable the Bill to be passed?
Norman: I think its extremely likely that Labour and National will come together. That’s probably the most likely outcome. Because they’re not that far apart on it. Yeah, I think we’re going to see a grand coalition on it.
Campbell: Really. Because there’s a perception out there that the Greens are just huffing and puffing to express their displeasure – but if you don’t get this scheme passed, surely you won’t have anything to build on during the next term of government ?
Norman: Well sometimes, given the choice between something that gives the appearance of doing something but really does nothing – or just calling it. And saying truly you’re not doing anything , and lets be honest about it. That’s the call we’ll have to make when we see the final Bill.
Campbell: And when do you expect that will be?
Norman: I don’t know. The select committee has quite a lot of its plate, and the Government is going to have its finger in there as well. And everyone else.
Click for big version
Norman: : Yeah…and its actually in a good position to reduce its emissions. The technology already exists. Its just nuts. They’re half of our emissions, and we’re saying the sector doesn’t have to do anything.
Campbell: Excuse me, but the technology to reduce methane emissions doesn’t exist at the moment.
Norman: The technology to reduce nitrous oxide emissions exists at the moment, with nitrification inhibitors.
Campbell: But they don’t work so well on hill country terrain. You can’t extrapolate from the success of nitrification inhibitors in low country farming and say the technology to reduce agricultural emnissions currently exists. It doesn’t deal at all with the methane.
Norman: Yeah. That’s right. What we’re trying to do here is reduce emissions back to 1990 levels. We’re not trying to reduce them to zero. Different components when put together, produce a reduction in greenhouse emissions. Organic farming for instance, produces a lot less greenhouse emissions. A price signal to agriculture will help people to adopt them.
Norman: I don’t think we’re the people to answer that question. We do what we think is right and we speak out for what we think is right. In terms of our principles and what we think is right for the world.
Campbell: To play that role don’t the Greens always have to be outside the compromises inherent in being a junior partner within government?
Norman: I don’t think so. I think what we’re seeing is an evolution of the MMP system, which is creating more and more scope for smaller parties engaged in government. In the beginning it was very tight, and Cabinet collective responsibility meant you weren’t supposed to speak out. But I think its now been established that smaller parties can speak out, without that meaning the end of the Westminster system.
Campbell: So Winston is winning freedom for you all?
Norman: Giving more freedom to speak out. I think its Winston, its Peter Dunne, I think it’s the Greens. We’ve all played a part. And the Alliance in their own way, tried as well but they ran into more trouble.
Campbell: So this year, the Greens are in it to be in government, post-election?
Norman: Yeah, we’re always….we want to be in government.
Campbell: And given your priorities…if you were to find yourselves in government later this year, what would you seek to achieve in your first 100 days ?
Norman: (laughs) I think it’s a bit early for me to be talking about what the Greens first 100 days programme is. Closer to the election, we will be releasing our policy priorities. We’re not doing it in May…In any post election discussions, there will be a wide range of things we will negotiate on.
Campbell: Ideally, Labour would probably like to maintain its current governing arrangement. The way you currently expect the numbers to fall, do you think Labour will be able to form a government without the Greens?
Norman: That will depend on the election outcome…I don’t know. I can’t know. You don’t know. Nobody knows.
Campbell: I’ve asked whether you want to be in government. I’m now asking whether you expect the current government will need you to form the next government – which I think is a reasonable question.
Norman: The smaller parties will be necessary for who-ever forms the next government. As to the exact constellation, I think that will depend on how the votes fall. I’ve haven’t answered your first question, but have answered your second one about the role of smaller parties, rather than the Greens alone.
Campbell: Are you expecting the Greens to become the centre right’s bogey during this year’s election campaign? Meaning : that if Labour is re-elected you’ll get the Greens as well telling us how to raise kids and making everyone ride bicycles, or whatever…?
Norman: There’ll be some of that. I think they can’t go too far, because even more conservative voyers have recognised that the environmental problems are real ones. So if National goes on a big Green bashing campaign, I think it will suggest to their own voters that they’re not serious about the environment.
Campbell: At times, the prevailing image is that Greens are always bringing us the bad news, always telling us to do better. Do you think this could become a problem among young voters in particular – that the Greens seem like Mum, always telling us to clean our room ?
Norman: I don’t think people see us as Mum. I’d like to think people think of the Greens as the party that tells it like it is, even if like it is isn’t always fantastic. We are the party that said oil was going to become more expensive when it wasn’t very popular to say that.
And we were right. I would also like to think we put up positive solutions as well as pointing to the problems. And maybe though these are probably Green voters already, I’d to think people see us as the party that has a vision of a better society where we don’t have toi work our arses off all the time, and don’t have to hold down two jobs and pay a giant mortgage to a foreign owned bank.
Campbell: Do you think most of your members want you to support Labour, or National?
Norman: Well, we haven’t asked them, at this stage. There will be a process later. We haven’t gone through a formal process.
Campbell: And they haven’t told you yet?
Norman: : What we have done is –
Campbell: Have they told you ? Have you had feedback from them on this point?
Norman: Yeah, we have had a very intense discussion around political positioning. As a party we run a very large internal process.
Campbell: And what have they told you, on balance, about their preferred coalition partner?
Norman: That’s for the party. That’s an internal party discussion.
Campbell: So they may have told you, but you’d prefer to keep the result in-house at the moment?
Norman: Yes. If people want political parties to have internal democracy, and people say they do, they need to have internal discussions.
Campbell: Right. And you’re saying you can’t tell the public what the Greens internal preference is right now, between Labour and National?
Norman: Right. We haven’t even had our AGM. Where we will adopt, hopefully, a process for discussing this.`At our AGM, there’s a remit going forward on a way to deal with all of this and the membership hasn’t even voted on that yet, so I’m not going to talk about how the membership may view other questions.
Campbell: National are way ahead in the polls. If National’s social policies don’t look too bad and its environment policies are pretty much the same as Labour – and if they offered some concessions like say, the Environment Ministry or offered to electrify the main trunk railway line, would that be the sort of support package the Greens could possibly consider?
Norman: We will go through…we will assess, assuming the remit at the AGM goes ahead…The process we will follow will be to assess the policies of the two parties, and we will make an announcement about our preferred partner.
Campbell: Agreed. And I was offering a hypothetical scenario about what may, or may not, be acceptable. And it wouldn’t be out of the ballpark, would it?
Norman: The Greens will be looking at the policies of the two major parties and announcing our preference… I’m not going to answer your hypothetical question.
Campbell: It’s not a hypothetical in an election year, and it builds on statements you’ve made yourself. In order to explore the boundaries of choice, it’s a reasonable question.
Norman:. And we will give an answer to that question. But not until the members have gone through the process.
Campbell: And when can the public expect to get an indication of the Greens coalition preference? During the election campaign itself?
Norman: Quite possibly.
Campbell:. So even though the conference is in June and the election may not be until November, the public can’t expect to know the Greens coalition preference in the interim?
Norman: Ah, I’m saying we will make it before the election. We ourselves haven’t decided exactly when. Before the election.
Campbell: But at the moment, all options are on the table?
Norman: We’re going through a process of assessing what we think of all the policies.
Campbell: So while that process of consideration is still to be carried out and completed, both major parties are possible coalition partners ?
Norman: At this stage, we are assessing the policies of all parties, and seeing how close and far we are from them.
Campbell: Let me put it the reverse way. If, as you say, all parties’ policies are currently being considered, doesn’t that necessarily mean no party is being ruled out as a possible partner for the Greens ?
Norman: : We will be looking at the policies of all parties.
Norman: : No. I don’t think it will make much difference. You’ve had a 20 % increase in some food prices and some much more than that. The maximum reduction in GST is 12 ½ %. You’ve got a supermarket duopoly that probably won’t even pass that on. You’re looking at a 6 % decrease if you’re lucky, and that’s got to be balanced against the high compliance costs of doing it.
Campbell: Do you think Michael Cullen made a mistake in ruling out making the first $9,500 of income, tax free?
Norman: Our policy has always been to use environmental taxes to take off the first quantum, so yeah we don’t agree with that. We think he should have done that. We’re actually in the middle of looking at our tax policy. Both the ETS and Working for Families have changed [things ] and we’re re-calculating the numbers.
Campbell: If you make New Zealand firms bear the ETS burden against foreign rivals who aren’t paying the same price for carbon won’t you just (a) cripple our exporters and (b) induce them to shift their operations offshore?
Norman: : Well we’ve always said we are open to special cases. There may be special cases where people will shift overseas. I agree with you. If someone is going to shift and still produce the same amount of emissions overseas rhen what’s the gain? However, we are watching it incrediblyclosely. For example, with dairy that’s not the case [that they can shift offshore] Its not going to happen. Fonterra is already shifting a certain amount of prduction overseas and that has nothing to do with the ETS.
Campbell: Do you think dairy is currently in a commodity price bubble?
Norman: : It does look like it. But I don’t know. We might also be looking at a longer term trend where commodity producers get relatively high prices, because of capacity constraints. Industrial development theory always says primary produce prices and returns should slowly come down, but as we hit ecological limits maybe the price is always going to go up.
Campbell: Because if dairy prices are actually in a bubble, it will be self correcting when it comes to some of its environmental impacts.
Norman: : That’s not true, if there is no internalisation of those environmental externalities. But yes, if it’s a bubble yes, there could be drop off in production and in the pressures that is putting on the environment. Either way, we have to have the right price signals. Which means internalizing the environmental externalities. And that’s what we need to do. So that businesses can have certainty about investment…
Campbell: The counter view [to the price bubble] is that China and other developed countries are getting a taste for meat and dairy – the foods of affluence – and that means high dairy prices are here for the foreseeable future. Won’t that lend strength to your arm in getting dairy farmers to face the true cost of their environmental impacts ?
Norman: : It would, but no one has an absoliute crystal ball on that. The more important thing is to get the price right, either way.
Campbell: Looking at the recent poll numbers do the Greens expect the race to tighten up ?
Norman: I don’t know.Campbell: So your campaign planning makes no assumptions about whether the race will be tight, or not?
Norman: The campaign planning has to take into account both possibilities.
Campbell: What do you think the main priority for centre left voters will be – to get Labour back, or to ensure the Greens are there to keep them honest?
Norman: I think there’s 10% per cent of the population who are very sympathetic to the Greens, and want to make sure the Greens are there. There’s a significant proportion who will make sure the Greens get back. I think we’ll do better, actually.
Campbell: Yet given the center-left is one of your prime feeding grounds, aren’t the Greens possibly seen as somewhat of a bonus, compared to keeping the Tories out?
Norman: : I think there are a lot of people who – when they’re asked who they are going to vote for, say they are going to vote National. But who are actually not particularly firm about it. And who actually have a lot of sympathy for the Greens and their environmental agenda. So I think the electorate is a bit more complicated than that. I think there are plenty of people currently seen as National voters who may end up voting Green…
Campbell: That’s an interesting answer to a different question.
Norman: OK. If I imagine I’m a centre-left voter… I think people like that think that if they want a Labour -led government its only going to happen if the Greens are there. It’s a false counter position, because even if you’re a person who wants Labour in, you know you’re not going to get Labour unless the Greens are there.
Campbell: But as the race tightens it can also become a dilemma, as we saw in 2005. One that can threaten the Greens’ survival. Some people portray it as a choice between voting with your head or with your heart.
Norman: : Vote with both your head and your heart. If you care about the issues the Greens care about, vote for us. If you don’t. vote for some one else. Its that simple.
Campbell: That’s saying to them there isn’t a dilemma. You’re not helping them sort out the tactical choice. Which under MMP may help – or hinder, you tell me – the chances of getting a centre left outcome.
Norman: : Well, my response is to say if you want the issues the Greens care about promoted in parliament, you want a strong Green party. And Labour will do whatever Labour does, which is to suck up to United Future or NZ First or whatever. And they’ll sell you out. If you care about social justice and environmental sustainability, vote for the Greens.
Campbell: As things stand right now, do you expect to win more votes than you lose from the Section 59 initiative ?
Norman: I don’t know.
Campbell: You don’t know if its been a positive for the party?
Norman: : I think its been positive in the sense that it was our policy. It was the right thing to do, it was a good thing to do. In terms of whether it is going to win or lose us votes, I guess we don’t really know. It does feel like we’ve turned a corner on it and people have realized it wasn’t the end of the world. And a lot of NGOs have come out in support of it. So I’m hopeful it will be positive, in terms of votes.
Campbell: Some of your MPs polarize people. Is Sue Bradford for instance, seen by you as an asset in this election campaign?
Norman: She is definitely an asset.
Campbell: In what ways ?
Norman: Sue is rightly seen as one of the champions of the poor and of the young…in New Zealand. People respond to someone who champions the underdog. Obviously, our whole caucus are champions of the underdog, as well.