Victoria Ransom and Phillip Mills: The greatest threat to New Zealand business

Many argue feared financial events will occur, but this will not create the predicted global chaos. Photo / iStock

Working in the very different worlds of IT and fitness, we nonetheless face similar challenges: new forms of competition, the pace of digital disruption, and staying relevant to our current generation of customers.

But increasingly the threat of greatest concern to leaders in our industries, and others, is climate change. Global warming has the potential to devastate the global economy and is coming at us much more quickly than politicians and the public at large seem to recognise.

At the UN conference in Paris last December it was agreed to limit global warming to 2 degrees above pre-industrial times, with a target of 1.5 degrees now widely regarded as the safe upper limit for the preservation of civilisation as we know it. At our current rate of greenhouse gas (GHG) emissions, we are arithmetically likely to hit that point by 2025.

Research published in March by the University of Queensland and Griffith University states that we are in fact more likely to reach 1.5 degrees by 2020. And data published in April by NASA and the National Oceanic and Atmospheric Administration (NOAA) shows us having already hit that level for the January-March period this year!

Fossil fuels are the source of 80 per cent of manmade GHG emissions. And while there is increasing evidence that we are technologically capable of transitioning to 100 per cent renewable energy by 2030, this is generally judged to be politically impossible.

When the price of oil sank below US$30 per barrel earlier this year there were genuine geopolitical fears: of unstable, fossil-fuel-reliant economies such as Russia going broke, or a collapse driven by trillions of dollars being wiped from the global financial system.

The political establishment took this as a sign that any transition therefore needs to be slow and gradual.

There is a suspicion that this thinking is driven by vested interest groups.

Many argue that we should at least transfer the global US$500M of annual fossil fuel subsidies to the development of renewables and make polluters pay a fairer portion of the costs imposed on society by their activities.

Many also argue that the feared financial events will occur, as investors shift their money out of fossil fuels, and renewables become cheaper - but that this will not create the predicted global chaos, owing to the rapid growth in new low carbon industries.

These arguments will drag on for years and, irrespective of their outcome, we are unlikely to make the technological transition in time to stay under 1.5 degrees warming. To ensure our safety, we have to find ways of taking GHGs, primarily CO2, back out of the atmosphere - what scientists call sequestration - while we make the transition away from fossil fuels.

There are various potential ways of achieving this.

Overall it is crucial that any sequestration initiatives are not used as an excuse to continue with business as usual.

One is through technological means, such as carbon capture and storage, but this is unlikely to be scalable until mid-century and too late to solve the immediate problem. Another is by geo-engineering techniques, such as pumping soot into the upper atmosphere to reduce terrestrial heat penetration. Such methods carry catastrophic risks and have been banned by international convention. In the short term, traditional means of sequestration such as trees and soil are likely to be our best option.

A ten-year-old acacia tree in the tropics absorbs 22.6kg of carbon per year, or 83kg of CO2. If we planted one of these for every human on earth this year, we would delay 1.5 degrees warming by eight years, or 2 degrees by 16 years, giving ourselves more time to make the technological transition to carbon neutrality.

Trees planted in temperate zones like New Zealand sequester less than those planted in the tropics. However, we could take our country back to safe 1990 emissions levels by planting 187 million permanent native trees between now and 2030; forty for every New Zealander.

This may seem like a difficult goal, but similar targets have been achieved overseas. India, for example, just planted 49 million trees in 24 hours.

Pure Advantage's "Our Forest Future" report shows that, with concerted effort, 187 million new trees in New Zealand is achievable. It would simultaneously help deal with our problems of river pollution and our 1.3 million hectares of erosion-prone land. It would also provide a boost to our Manuka honey industry, among others, and enable larger planters the ability to earn income via the Emissions Trading Scheme (ETS).

The Tindall Foundation, supported by Pure Advantage and other NGOs and corporate groups, is creating a plan to do just this, details of which are due to be released at the end of this year.

The other opportunity lies in soil sequestration using no-till or low-till agriculture (sometimes known as biological farming) which is a part of some organic codes.

When soil is ploughed it releases its carbon into the atmosphere. When we farm biologically, the soil sequesters carbon, in the process increasing fertility and depth. Machinery and techniques for this type of farming are now becoming mainstream, and are described in books such as The Soil Will Save Us by Kristin Ohlson and The Carbon Farming Solution by Yale Professor Eric Toensmeier.

The other opportunity lies in soil sequestration using no-till or low-till agriculture (sometimes known as biological farming) which is a part of some organic codes.

According to the Rodale Institute, "recent data from farming systems and pasture trials around the globe show that we could sequester more than 100 per cent of current annual CO2 emissions with a switch to widely available and inexpensive organic management practices, which we term 'regenerative organic agriculture'... These practices work to maximise carbon fixation while minimising the loss of that carbon once returned to the soil, reversing the greenhouse effect."

A 2015 Chinese Academy of Sciences study found that "replacing chemical fertiliser with organic manure significantly decreased the emission of GHGs. Yields of wheat and corn also increased as the soil fertility was improved by the application of cattle manure. Totally replacing chemical fertiliser with organic manure decreased GHG emissions, which reversed the agriculture ecosystem from a carbon source... to a carbon sink."

Last year Denmark announced a plan to double its organic farmland by 2020 and, at the Paris climate talks, 25 countries enrolled in the French government's "4 per 1000" initiative, a global agreement to encourage regenerative farming as a solution for food security and the climate crisis.

Until now soil sequestration has been difficult to measure and reward, as every individual farm has differing levels of soil depth and fertility. Measurement technology does now exist, however, and it would be possible to incentivise organic farming in many ways, such as those adopted in Denmark, and by including it in New Zealand's ETS.

One of the advantages for New Zealand doing this would be farm animals contributing a positive input to the system that balanced the liability of their methane emissions. There are also economic benefits stemming from the high prices the world is currently prepared to pay for organic food, which people increasingly regard as healthier than conventional food, owing to lower levels of pesticides, herbicides and other chemical inputs. Organic milk powder currently sells for around $14,000 per tonne, versus conventional milk powder at around $3,000.

But the devil is in the detail. The techniques that create net sequestration are very precise, the most productive being the combination of tree planting with organic farming in what is called silvopasture. Any policies would need to be carefully crafted.

Overall it is crucial that any sequestration initiatives are not used as an excuse to continue with business as usual. We must still make the transition to carbon neutrality as quickly as possible, as the total potential for carbon storage in trees and soil is smaller than the carbon stored in unused fossil fuels.

If the world is to avoid unprecedented ecological, social and economic turmoil as a result of climate change, it is imperative we limit global warming to 1.5 degrees above pre-industrial times.

Given current political inertia we cannot rely on reaching this target through carbon emission reductions alone. We must aggressively pursue carbon sequestration as well. Right now the most effective methods for this - planting more trees and increasing our use of no-till farming - are right in New Zealand's wheelhouse. Let's help lead the way by becoming a model for reforestation and carbon-negative farming.

Victoria Ransom is the founder of Wildfire Interactive and former Director of Product at Google. Phillip Mills is CEO of Les Mills International. Both are past Ernst & Young NZ Entrepreneur of the Year Award winners and members of Pure Advantage’s trustees board along with Sir Stephen Tindall, Rob Morrison, Joan Withers, Chris Liddell, Sir Mark Solomon, Katherine Corich, Geoff Ross, Jeremy Moon and Sir George Fistonich.