Updates in this blueish purple hue
Everyone’s a critic, eh?
When it comes to a post-Covid-19 recovery plan, it appears everyone has an opinion about what can best be done to lift New Zealand out of this imminent recession and into a glorious future. I too had aspirations to pen some lofty words about a #greenrecovery only to discover it was already trending with some far better analysis by far smarter people in far more powerful positions.
Why reinvent the wheel. Instead of adding to the pile-on, I’ve started to collect the best of the ‘reckons’ into one place, in one easy-to-read summary with handy links to the sources and the occasional lol. Of course, to say it’s the best already implies I’ve filtered according to my own worldview. What’s best in my opinion may not be the same as others, especially the talking heads in loud-mouth land. You’re welcome to leave at this point – though just be careful which talking head you’re hoping to follow.
My criteria for assessing what’s a good post-Covid reckons is the following:
- Is it well researched?
- Does it deliver a low-carbon emissions future?
- Does it make the most of our current assets and opportunities?
I have included both right and left of the political spectrum and don’t really care if it’s a bit wacky. If we can’t do blue-sky now, when can we?
How to think about this
This is probably a good time to pour yourself a stiff glass of hand sanitser that was formerly a gin. But don’t leave us just yet because the reckoning has only just begun!
I assume you know how royally rogered we are, so it’s a good time to meet the man himself. Roger Dennis, a self-described innovation consultant and futurist, teamed up with Xero founder and tech-bro Rod Drury to present a useful framework for thinking our way out of this. We’ll come back to Rod later but here’s Roger’s framework:
Roger’s idea is to stage the recovery in three phases:
- Red zone: This immediate crisis management, which is where we’re currently at: lockdown, containment, daily briefings, lustful thoughts about Ashley Bloomfield:
- Orange zone: the overwhelming driver here is getting the economy moving again, getting people back into paid work and ensuring the safety-net is robust, while simultaneously keeping the virus under control. This is the phase for 1800 ‘shovel-ready’ projects that, let’s be honest, are mostly ‘shovel-in-the-ground already’ being considered by Infrastructure chief Mark Binns. By the way, don’t you think he looks a lot like Guyon Espiner?
There's one point Roger makes that I like: this phase should be a rolling plan, employing a test-and-learn approach and giving those in control the permission to make mistakes. I’m down with that. Unfortunately, that also makes it a perfect time for a visitation from Captain Hindsight, so I guess that means Duncan Garner remains employed. Oh well.
- Yellow zone: this is where it gets really interesting. It’s where dreams and visions live and has been the focus of most of the speculation about a renewed New Zealand. We’ll come to those soon.
As Roger told me on This Climate Business: “In a crisis, it’s tempting to remain in the ‘red zone’ because you feel like you’re in control. But to emerge stronger than before it’s absolutely necessary to manage all three at the same time. This is not what happened after the Christchurch earthquake and we should learn from that mistake.”
This plan sounds eminently sensible and just the kind of advice a high-functioning client of Roger’s might follow.
But this is political. We’re talking about the need for bipartisan agreement, cross-disciplinary cooperation and the ability to forgive the odd mistake. It seems unlikely.
Maybe not. Robert Patman, a Professor of International Relations at the University of Otago, argues the stark reality of Covid-19 signals the end of short-term politics. Writing in Newsroom, Patman says:
“For policy-makers, the key lesson of the Covid-19 crisis is that effective leadership must be informed above all by science and the realities of complex interdependence within and across the borders of states. “If this is true, it will become increasingly difficult for political leadership, based on nationalist posturing and slogans, to continue to deny the crisis of climate change, which constitutes the biggest threat to human life on earth. And such crisis recognition is likely to have radical geopolitical consequences as well.”
Wow, let’s hope he’s right. If so, what dreams and visions for the ‘yellow zone’ should we expect?
Paul Henry grumps
Not much according to retired broadcaster and former Basil Brush impersonator Paul Henry.
Three weeks into his four-week show 'Rebuilding Paradise', Henry told Newsroom he was underwhelmed by the government's performance beyond crisis management:
“I think there is a good chance we [New Zealand] will miss the opportunity. I was hoping that there could be a bounce forward not a bounce back. It’s the human way – a life of least resistance. I’m not depressed, I’m disappointed."
Why has he come to this conclusion so quickly?
“It is basically the vibe around the interviews I’ve done.” Henry gives the example of Rob Fyfe, the former CEO of Air New Zealand who is now working with the Government in a voluntary role liaising with the private sector. A week ago Fyfe told Henry:
"I haven't seen a long-term plan yet. I think the last six weeks I've seen us fighting a fire and trying to get back on our feet. We need a long-term plan. The world's changed, and it's changed for many years to come."
According to Henry, “you could see the frustration on his face.” Fyfe’s impatience seems to have rubbed off on the broadcaster.
“There is not one person in the Government that has a plan or can articulate a plan.
"A plan has a start, a process and a goal….not one Minister can articulate what that plan is.
“Instead, it’s panic and continue to employ as many people as possible. That is not a plan’s arsehole."
That would be disappointing but, hey, there's still a whole day to go before Budget to deliver the following wishlists.
A green new deal
The first out of the blocks with a wishlist as long as a Level-3 Macca’s queue was Greenpeace with its Green New Deal: “Building a cleaner, resilient and equitable Aotearoa NZ in response to the Covid-19 Coronavirus Crisis.”
In keeping with Roger’s framework it splits the recommendations into two phases. To whit:
Immediate shovel-ready projects to prioritise · Providing finance and support for home insulation and heat pumps · Fast-tracking fencing and planting of on-farm waterways with Government finance · Attaching strict, science-aligned decarbonisation, biodiversity enhancement and workers’ rights conditions to corporate bailouts · Introducing a Universal Basic Income Priority investments for the long-term wellbeing of Aotearoa · Unprecedented investment in public transport, cycling and rail infrastructure to accelerate our mobility into the 21st century · Billions in finance for distributed solar and wind, alongside upgrades to the power grid · A billion-dollar regenerative farming fund to support farmers to transition to regenerative agriculture · A sizable boost in finance for DOC to employ a “conservation corps” of people to eradicate pests, plant native trees and restore critical habitats · Constructing new, affordable homes that meet the highest energy-efficiency standards · Put millions into ocean restoration projects to restore critical marine ecosystems.
Of special note is a call to put decarbonising strings on any business bailouts.
“.. sizable bailouts to big businesses must come with conditions attached, or we miss a major opportunity to combat climate change and unjust working conditions. Firstly, bailouts must include conditions to align business practice with biodiversity and climate goals, such as the Zero Carbon Act. Secondly, they must be conditional on companies not giving big payouts to shareholders and CEOs. Thirdly, bailouts should be in the form of a loan or equity rather than a gift.
"The Air New Zealand bailout is an example of where such commitments should be required. Air travel accounts for two percent of global emissions but could swallow up as much as a quarter of the global carbon budget by 2050. As such, airline bailouts must come with commitments, including but not limited to:
• Retiring older, inefficient aircraft
• Investing significantly in clean fuels and electric aircraft
• Publishing a Corporate Low-Carbon Transition Plan in line with IPCC 1.5 scenarios."
This is not a dumb idea and is in line with conservation groups worldwide and seems to have scored a high-profile win in France, according to the Guardian:
“France’s minister for ecological transition, Élisabeth Borne, insisted Air France was not getting “a blank cheque”. The government has set “ecological commitments”, she said, including a 50% reduction in carbon emissions on domestic flights by 2024, as well as investing in more fuel-efficient planes.”
EDS
The other green wish list comes from the Environmental Defence Society (EDS), whose team photo seems like such a wasted opportunity for memorable album art. Rudy Ray Moore’s classic “This Ain’t No White Christmas’ comes to mind.
The EDS’ Gary Taylor warns that “shovel-ready” is not good enough on its own. “This is an historical opportunity to fix our infrastructure deficit and create a modern, low carbon economy that delivers essential services for all New Zealanders.”
I’m with ya, Gazza. So what’s your plan? It’s similar to Greenpeace in that, projects should focus on:
"a massive house-building programme, funded and co-ordinated by the Government, akin to what occurred in the 1930s. … Improved social outcomes for the homeless and inadequately housed, plus the numbers of jobs created, should have that programme at the top of the list
improved transport linkages especially for public transport and freight;
boosting renewable electricity generation to 100%;
electrification of rail and buses;
grid resilience; on distributed energy like solar;
sustainable capacity for our tourism sector ahead of its likely recovery in the medium term
emulate President Roosevelt’s New Deal and create a civilian Conservation Corps. Large numbers of workers could assist the Department of Conservation to strengthen our green infrastructure by creating new tracks and facilities, tackling pest and weed infestations, finally getting on top of wilding pines, replanting erosion-prone land in native forests and helping clean up old rubbish tips in danger from sea-level rise."
Given EDS’ long involvement in local government’s application of the Resource Management Act, it’s not surprising there’s a nod to water management:
“We need a strong focus on upgrading our dilapidated potable and wastewater systems in both Wellington and provincial New Zealand. This needs national co-ordination and funding and should go hand-in-hand with a restructuring of the way we deliver those services. Local government has been found out with long-deferred maintenance, inadequate responses to prolonged droughts and episodes of drinking water contamination that are unacceptable.”
By the way, the ramrodding of RMA changes comes with a warning from Hamish Rennie, an associate professor of planning at Lincoln University. He’s worried the fast-tracking of infra-structure projects and the overriding of some of the RMA rules, including appeals to the Supreme Court, will come with long-term risks.
He writes in The Spinoff: “The amendments to the RMA to address climate change will not come into force until 2022. By that time, many of the decisions under the Covid-19 recovery law will have been made without consideration of the legacy effects on climate change.”
Legal Haast Eagles
Speaking of legal matters, Lawyers for Climate Action have been busy, writing two letters to Jacinda and her ministers pointing out the legal obligations to make any 'shovel ready' projects emissions compliant. To whit:
"...the Government is under an obligation to use the fiscal stimulus funds to help New Zealand transition to a low-emissions and climate-resilient economy. We consider that this is not only sound policy, but required of the Government as a matter of law, despite the traditional reluctance of the courts to examine broad funding decisions."
The letter cites four legal reasons why, the most interesting (to me) being a 2019 Netherland's Supreme Court ruling that "the right to life under Article 2 of the European Convention on Human Rights places a positive obligation on the Dutch Government to make emissions cuts at a scale and in a timeframe that is consistent with keeping global warming below 1.5°."
As my dad used to say, there are only two types of people in the world: the Dutch and those who want to be.
Europa Groen!
And speaking of the Germans, both the EDS and Greenpeace wishlists emulate the big daddy of such deals, the European Green Deal. The European President Ursula von der Leyen says the Green Deal will become the ‘motor that drives the recovery’. In brief, the top five priorities include:
Renewable energy
Cleaner cars
Rennovating our houses for energy efficiency
Reuse materials eg: recycled steel
Buying local.
Von der Leyen’s tweet on the matter got an eye-watering amount of abuse that makes quite fun/depressing reading. No one told the South Koreans though, where elections last week delivered a massive mandate to the incumbent government to implement “a European-style Green New Deal, making it the nation first in East Asia to enact a pledge to reach net zero emissions by 2050,” according to Forbes.
I imagine that if New Zealand had an election right now we’d get a similar result with a Labour-style New Green Deal on the table. It’s a long way to September though and we’ve still got to get through Level 2.
Dear Jacinda
Another open letter to Jacinda and Company, this time from consultants Cali Woods, is gathering backing from experts, business leaders and brands asking the government to invest in a greener future.
"We have come together to urge the Government to spur sustainable possibility into reality during this economic reset.
"With opinions from contributing experts, this letter demonstrates that by combining Mātauranga Māori, technology and systems already in existence we can:
Build a strong, resilient economy
Begin living our international reputation as a green country
Respect Papatūānuku and her biophysical limits
Foster inclusive, true wellbeing for our people and the generations to come.
Doing so will result in a New Zealand with a strong, resilient, local economy that is truly sustainable and regenerative."
The letter is accompanied by opinions from industry experts on what such a green recovery would entail. I especially liked the section on renewables by David Tong.
"Removing regulatory barriers to community solar and wind projects will allow a number of shovel-ready electricity generation projects across the country to begin work rapidly, and could allow for a more equitable, resilient electricity system. Issuing a National Environmental Standard for community wind generation would allow many communities to rapidly begin work on building local clean energy projects. This can be further encouraged by providing zero-interest or low-cost loans for household solar and batteries."
Worth a read and you can sign the letter and add your logo to the website here.
A new tech deal
Back to Rod Drury. A flurry of media coverage in late April gave prominence to Rod and Roger Dennis for their ideas of a tech-heavy recovery, with the best pieces in Newsroom and (I’ve got to say this) my podcast This Climate Business. There seemed to be five big ideas:
Appointing a non-political, non-partisan group of community leaders who can be charged with the recovery. This could be a different group for each of the three phases but certainly requires out-of-the-box types. Rod suggested Steven Joyce who seems to me so inside he practically is a box.
Going 100% renewable in energy production by storing our excess energy in a massive dam or a series of dams. To my knowledge Rod hasn’t confirmed where this dam would be – and I forgot to ask him in my interview, d’uh! Not only will this give us branding power overseas but somehow give us lower cost energy for use in manufacturing and transport. “Renewable energy is for us what oil is the Saudis,” he says.
Doubling down on contactless payment technology and thereby stimulating investment in fintech. Rod wants to revive the spirit of eft-pos, which was world leading in its time but is now seen by some as a major obstacle to contactless tech from the likes of Visa
Rolling out 5G as if it were UFB. “Let’s treat 5G towers as public infrastructure that any number of telco businesses could provide mobile services over. With New Zealand and Australian superannuation funds looking for stable long-term investments and with low interest rates, let’s apply the UFB model to 5G and kick start the capital works. Let’s have the best mobile data infrastructure in the world.
Fifth, reviving the Peter Thiel Visa Programme (my words, not his) by encouraging the global super-rich to buy super-expensive land in the likes of Queenstown and build super-fancy homes. Rod realises that the idea is not easy to like, but hear him out: “We could make 1,000 sections available for, say, $5 million dollars plus construction project costs, therefore adding $5 billion of residential construction and jobs to our economy this year. How do we feel about that now?”
Most people seem to feel sick in their mouth, Rod. The reaction on social was pretty fast and negative and the idea even got a special dismissal from the PM.
Rod is a robust fellow and can take the heat. It’s probably his Gareth Morgan cats moment to be honest. But it generated a ton of coverage and achieved what he wanted.
The ghost of crises past
Speaking of Rogers, media coverage was given to a paper published in early May by none other than Sir Roger Douglas, former Finance Minister and eponymous leader of Rogernomics. I thought he was dead. Seriously.
The paper, written in partnership with Robert MacCulloch of the University of Auckland, is called “In a new world new thinking is required” and is a criticism of the government’s fiscal response to the crisis. Strictly speaking it’s not really a wishlist for the recovery, more a warning about the consequences of solving this thing with a helicopter loaded with twenty dollars bills.
The NZ Herald’s Fran O’Sullivan summarised it nicely: “Spray now, pay later.”
Here’s two relevant quotes from the exec summary:
“The Covid-19 outbreak has not only precipitated a health emergency, but also an economic crisis, unparalleled in modern history. For New Zealand to emerge from that crisis in a relatively healthy state, the Labour government will need to provide a clear framework for recovery, implementing policies which clearly prioritize those most affected by the societal and economic lockdown necessitated by the outbreak. To date, such prioritization has been lacking, with the Wage Subsidy Scheme unfairly advantaging big business and the professional elite, at the cost of money and resources which could have been better directed towards assisting the newly unemployed – namely workers, their families, and small business owners. Ultimately, poorly targeted support in the form of helicopter payments, wage subsidies, or broad-based tax cuts (such as a moratorium on GST) is wasteful, and will only serve to entrench inequalities that existed prior to the pandemic.”
“…To help manage the recovery, and ensure our younger generations are not saddled with debt, the government must also identify, and eliminate, unnecessary spending, privilege, and waste. It can find an extra $15 billion per annum by doing so, contributing to the recovery in the short term, and – more generally – to implementing wider scale reform once the immediate crisis has been put behind it.”
In the paper, the pair criticise spending on infrastructure.
"A new, improved highway between Christchurch and Dunedin, or a fast-train link between Hamilton and Auckland, is of no immediate benefit to the café owner in Whangarei, the florist in Kerikeri, or the pet shop owner in Blenheim, whose very livelihoods are threatened … They - and the people they employ - instead need real, generous, and targeted Government assistance to help get them back on their feet and keep them in work."
I think we're all Keynesians now, aren't we? I expect this paper will be filed under a pile of Warehouse flyers somewhere near Grant Robertson's wheelie bin.
The end of oil
There’s a long list of people who hope Covid-19 will signal the end of one kind of thing (insert the thing you hate) and rise of another (insert the thing you love).
Most prominent are the fossil fuel haterz who are gonna hate no matter whether it’s boom or bust. And talk about bust! Media gave prominence to the collapse in West Texas Intermediate (WTI), the benchmark for US oil, which fell as low as minus $37.63 a barrel. Never mind that the price has rebounded, according to Forbes, “nearly 20% on Tuesday April 5, with the June futures contract for West Texas Intermediate crude reaching $24.56 on its fifth straight day of gains.”
What comes down must go up, it seems.
But John Barry of Queen’s University Belfast summarises the end-of-oil dream nicely:
"The fossil fuel industry was already struggling before nationwide lockdowns caused a crash in consumer demand. States should end the subsidies propping up the industry and re-allocate that money to research and development funding for battery storage technologies and clean energy. Given how weak the sector is – with oil prices plumbing new lows each day – states could buy oil and gas companies out and take their reserves into public ownership, effectively keeping those fuels in the ground. Displaced workers could be compensated and retrained, which has happened in the Spanish coal industry."
And no less than the International Energy Agency is predicting dire future for fossil fuels post-Covid. I read this in the Guardian:
“The International Energy Agency said the outbreak of Covid-19 would wipe out demand for fossil fuels by prompting a collapse in energy demand seven times greater than the slump caused by the global financial crisis.
"In a report, the IEA said the most severe plunge in energy demand since the second world war would trigger multi-decade lows for the world’s consumption of oil, gas and coal while renewable energy continued to grow.
"The steady rise of renewable energy combined with the collapse in demand for fossil fuels means clean electricity will play its largest ever role in the global energy system this year, and help erase a decade’s growth of global carbon emissions.
"Fatih Birol, the IEA’s executive director, said: “The plunge in demand for nearly all major fuels is staggering, especially for coal, oil and gas. Only renewables are holding up during the previously unheard of slump in electricity use.” ”
In New Zealand, Covid-19 nailed it first oil victim when OMV announced on April 9 that it is postponing drilling its Maui-8 exploration well indefinitely due to the Covid-19 crisis. Greenpeace claimed it "a win of generational significance".
We’ll see.
The rise of wood
Meanwhile the opportunity for a green rebound has also aroused the interest of the wood industry. The NZ Herald quoted mayors, port bosses and wood industry leaders arguing for a ‘wood-first’ policy, similar to that taken the by Rotorua Lakes Council. The idea is to preference wood over construction alternatives such as steel, concrete, plastics and composites. The benefits claimed are:
To support the creation of forestry, wood processing, off-site manufacturing and construction job
To diversify log markets away from current heavy reliance on China
To create an export industry for New Zealand engineered wood
To make our built environment more environmentally friendly
To progress New Zealand's One Billion Trees programme
Wooden buildings often perform better in earthquakes, are faster and safer to build, can be cheaper, and minimise waste and noise from construction
The dream of a UBI
Not to miss a beat, the Leader of The Opportunity Party, Geoff Simmons, who’s important enough to have his very own Wikipedia listing, believes this is a great moment to introduce a Universal Basic Income. A quick primer on this idea, from an article by him in Interest.co.nz:
“Everyone receives it, eliminating stigma, reducing bureaucracy and making sure nobody falls through the cracks. It honours unpaid work, for example parents and carers. It is also future proofed for an increasingly dynamic ‘gig’ economy. With the impending problems of automation and artificial intelligence, people will need to move in and out of work, retrain, and start businesses. Our existing welfare system won’t be able to cope, which is why I believe that a UBI is inevitable.”
Sounds heavenly. You’d think UBI would get support from the left. But I was surprised that it gets the thumbs down, at least for now, from Auckland University’s Susan St John and the Thinking Left’s snappiest dresser Max Rashbrooke. Doesn’t he look smart!
And this from the NZ Herald’s man-about-Ponsonby, Simon Wilson:
“UBI, as that line of thinking suggests, falls to pieces on the rock of how much. If everyone was paid a UBI equivalent to a single person's superannuation ($652.04 per fortnight after tax), it would cost the country over $80 billion a year.
"If we all got $200 in the hand each week, as Gareth Morgan has suggested, it would still cost more than $50b a year. But for many people, $200 wouldn't even pay the rent.”
A new deal to govern
The candidate for the most organised ‘reckons’ must go the Lever Room, a privately funded thinky-tanky group led by get-up-and-go-type Rebecca Mills. I say thinky-tanky because I’m not sure I understand what the official description of Lever Room means: “New Zealand’s oldest specialist impact consultancy. It works at the intersection of innovation and sustainability, with a dedicated focus on impact strategy and measurement.”
Better people than me obviously do know what it means, though, because Rebecca has pulled together an impressive collection of braniacs, across a wide range of sectors, in a fantastically short time to produce a great document. Here they is:
The report, called 'Build Back Better', looks at the recovery through a Circular Economy lens and tests the outputs against social, environmental and economic measures. I can’t help think that Rebecca and Roger Dennis need to have some strategy babies.
So what does ‘Build Back Better’ say? In my view it’s kind of similar to the above but more efffective for the collective heft of all those peeps just pictured. Here’s my Cliffs Notes:
Governance. Prepare for the future before it arrives: This is a great opportunity for corporate New Zealand to reset itself, to combat short-termism and adopt broader longer-term approaches to management and value creation. It’s not enough to solve new complex issues with old ways of leading and governing, 21st century skills are needed at the decision making table.
Develop our impact economy ecosystem: An impact economy is one that provides for environmental, social as well as economic wellbeing. The road to recovery and resilience will require collective effort and partnerships for the benefit of New Zealand’s future.
A ‘Build it Better’ investment fund: Examine how public sector investment may assist New Zealand’s valuable businesses, both during the current global health and economic crisis, and in the future to grow our country’s long-term holistic wealth.... One option may be for the Government to take temporary equity stakes in such companies. It should be stressed this is not an argument for nationalisation of private sector businesses, as the investment horizon in these cases may only be short to medium term. A relevant model for such investment is the United States TARP (Troubled Asset Recovery Program) created by the Obama Administration to assist with troubled corporate assets during the GFC in 2009. Using US taxpayer funds, the US Government purchased assets and took medium term equity positions. US Treasury data indicates that by 2015 almost all of the equity investments had been divested, either back to the original company or to new equity partners. In New Zealand, we don’t have investment funds already in place for this type of direct investment. Another option would be to leverage existing public sector funds and structures with extensions to their investment mandates. Irrespective of the structure deemed most suitable, once an appropriate mechanism is in place, the next obvious challenge will be defining and communicating the impact criteria against which significant businesses are selected and how investment decisions are made.
Applying an impact lens to company bailouts: To optimise New Zealand’s future recovery and profits, tailor made support to companies would benefit from the application of an impact lens to improve cumulative gains to our economy, society, and the environment. Screening would optimise impact across two broad timescales: a short-term recovery focus being to build back jobs, income, and economic growth as quickly as possible, and a longer-term resilience and sustainable growth focus optimising for broader holistic wealth across both financial and non-financial measures.
Homes: scaling up affordable resilient homes. Almost 1600 Kiwi deaths each winter are attributed to our cold, damp houses, with almost ½ of us saying we live in a cold house. New Zealand has roughly one million homes that are not sufficiently built to provide a healthy living environment which also has an impact on the long term welfare of our children, our health costs and productivity. Accelerating home insulation and sustainability and energy efficiency of New Zealand homes, has been a long standing concern. Building back better gives us the opportunity to reconsider and reset our approach.
Supporting our tourism and travel sectors: The success of our tourism industry depends on the quality of the environment we offer. With our natural environment, biodiversity and indigenous culture our primary assets as a nation we should prioritise investments that both protect and enhance it, while providing a unique experience for visitors. With an expectation of restrictions of borders to entry for some time, projects that utilise the existing workforce to join forces with established institutions and Government Departments to retrain them while enhancing our biodiversity will be well placed, as will investments into entities that seek to grow their revenue from the already strong domestic eco-tourism market.
Supporting our farmers and foresters: While global markets are currently challenging, they’re also increasingly demanding sustainably grown produce. Scaling up existing successful initiatives such Trees that Count and Million Metres Streams initiatives, supporting our Department of Conservation in eradicating wilding and investing in regenerative agriculture research, are useful ways to grow long term value for New Zealanders. ..There is also a window of opportunity to target economic stimulus spending in areas that provide multiple benefits – stimulating the economy in at-risk areas for pandemic-induced social and economic impacts while improving flood resilience. Using green infrastructure to improve flood resilience provides further benefits through improvements in water quality and biodiversity while still boosting employment (and at a faster rate than grey infrastructure).
Recycling tax revenues: There is an opportunity to incentivise building back better by reimagining new concessions and capital raising instruments that enhance natural and social capital. The recently published Tax Working Group (TWG’s) final report noted that according to the OECD, New Zealand ranked 30th out of 33 OECD countries for environmental tax revenue as a share of total tax revenue in 2013. The TWG’s reference to the growing importance of environmental taxes, although drowned out with noise surrounding capital gains tax, was underpinned by a number of specific recommendations for revenue raising, including taxing negative environmental externalities and recycling the revenue raised into measures that support the transition to a more sustainable economy. In his briefing at the launch of the final report, Michael Cullen stressed the need to initially recycle revenues to help those farmers most affected transition to a greener economy. In addition to the utilisation of green bonds and pay for outcomes contracts, tax measures could also be reviewed in the context of encouraging investment into nationally significant sustainable infrastructure projects.
All great stuff and I suspect that people in government are talking to the Lever Room about the report.
A new deal for society
The final and most weighty ‘reckons’ is saved for last. I’ve not finished reading it and there’s already a second report out. Steady on! It’s called The Future is Now, published by Koi Tu: the Centre for Informed Futures, which is part of the University of Auckland. It’s where Sir Peter Gluckman ended up after being Chief Scientist.
Here's what it says about itself:
"Whatever the strategy is to lift the current restrictions, the global disruption caused by the pandemic is of a scale and pervasiveness that it would be naive to imagine a return to the world of 2019. Social, environmental, business and geostrategic impacts will echo for a long time and force both global and local change.
"...We must seize this opportunity to have urgent reflection on many issues, not just to recover from the horrific disruption but to find the opportunities for a better future. Many of the issues this paper highlights are ones that we would have had to confront in coming decades anyhow, but the crisis accelerates the need for discussion; the future is indeed now."
Crickey, fightin’ words.
The first section of the report considers the conditions that would justify lowering to Level 2. Given that we’re just about there, I’ll skip that. From page 10 onwards (18 altogether) the paper discusses a wide range of questions, from geo-political and social to economic and health.
I’m especially interested in avoiding a return to a high-emissions economy. The report shares the same concern:
"Towards a greener economy: There has been much discussion in the period prior to the pandemic of the need for New Zealand to move towards a more sustainable and carbon neutral economy. Trade-offs that may have seemed impossible prior to this crisis may now be seen in a more credible light. This period of disruption could encourage entrepreneurs and innovators working alongside government to create opportunities and businesses that can thrive in a green economy.
"A related question is whether this crisis will prompt a faster move towards building a circular economy, with a stronger focus on repair and reuse, and on what we can produce from within our borders in a sustainable way. The post-pandemic reset should allow environmental and green economy projects to flourish – rather than a hasty build-back of business models that were essentially ticking time bombs in the face of climate change and ecological limits. How can this be coordinated across the economy, to take maximum opportunity of new ways of working, consuming, travelling, and living sustainably?"
Similar questions are posed about Covid-19’s impact on health, housing, tourism, sports, Maori, arts, public service, science and tech, education, immigration, international relations and government.
There no obvious answers. It’s more an agenda-setting document that could inform Roger Dennis’ yellow phase three. If there is an overall conclusion from Sir Peter it’s that the key attribute we must foster to succeed is trust. He gained quite a lot media attention (again Newsroom is probably best, dammit they’re good!) where he offers a strong sense of optimism for Aotearoa:
“The pandemic continues towards a potentially horrific crescendo for many countries. In this context both for the immediate and particularly for the longer term (including future pandemics and other crises), it will be important to understand and learn from this crisis; the implications of which extend well beyond infectious disease.
"Our national resilience will be tested, but we are better placed than most to both manage the acute phase and plan for a different future.”
We certainly are. I’ll finish with that daily updated graph by the Financial Times. If any country is in a position to make the most of the next few years, it’s us. Kia kaha!
