New Zealand depends on the environment too much for us to ignore the Kyoto Protocol, argues PETE HODGSON.
New Zealand stands to lose more than most other countries if nothing is done about climate change. And the Kyoto Protocol is the only multinational action in prospect.
No other developed nation depends on an equable, stable climate for its prosperity as much as New Zealand. We still buy our place in the developed world with grass.
On a global scale we contribute next to nothing to the emissions that cause climate change. But we stand to suffer economically from the effects much more than the more heavily industrialised western nations.
The situation is exactly the reverse of what Employers and Manufacturers Association (Northern) chief executive Alasdair Thompson wrote in the Business Herald (December 3), "New Zealand stands to lose more than most other countries by ratifying the Kyoto Protocol on climate change".
It is certainly true that the precise effects of global warming on New Zealand are still uncertain. But some impacts we can predict with increasing confidence.
Temperatures are likely to be higher and the effect on water resources will be significant. Rainfall is expected to increase in the west and decrease in the east. Floods are expected to become even more of a risk than they are now.
There may be some initial benefits for agriculture. A warmer climate would probably increase the growth rate or range of some crops.
But climate change threatens New Zealand agriculture too. Besides the risk of more floods and droughts, biosecurity is likely to come under increasing pressure - especially from subtropical pests and diseases.
Sea level rises could create further problems with saltwater intrusion into aquifers in regions such as Hawkes Bay and Canterbury.
In the longer run, the effects of climate change on agriculture are predicted to be overwhelmingly negative. More extreme weather, alone, would ensure that - let alone the water, habitat and biosecurity threats.
Then there are the threats to human health, from subtropical pests and diseases. And the threats to the country's infrastructure, from extreme weather and possible increases in sea levels.
We are all familiar with the huge costs of floods and droughts, let alone biosecurity threats, human health problems and infrastructure. The possible costs of global warming for New Zealand are huge, and they only get bigger with time.
Doing nothing about climate change would mean sleepwalking into these hazards. For a country as vulnerable as ours, that would be nothing short of negligence.
The Government has stated its intention to ratify the Kyoto Protocol by next September. In this we do not expect to lead the world, as Mr Thompson and others frequently claim. Next September is a target date widely shared among those nations intending to ratify, including the 16 member states of the EU.
The protocol will initially have limited effect, cutting emissions by 5 per cent on 1990 levels if all nations meet their targets. That is not much. But it is a start - and the only mechanism in sight offering any kind of start at all.
The protocol allows the world to make further progress in reducing greenhouse gas emissions in decades to come.
The first commitment period of 2008-2012, in which the current emissions reduction targets will apply, will be followed by others.
With the protocol in force it will be possible for developing countries and the United States to take on emissions targets in these subsequent commitment periods. But if the protocol is abandoned, the prospect of effective global action fades.
It has taken 10 years for the protocol to become a ratifiable mechanism. Too much time has been wasted already.
The Government is well aware that bad climate change policy imposes unnecessarily severe costs on the economy. That is why we are consulting widely before settling on a policy package - and why we will consult widely again next year when we have developed that package.
In the meantime, some economists have attempted to gauge the cost of ratification by guessing which policies will be used and then estimating the results. Extreme policy scenarios have produced some extreme cost estimates, which have been brandished noisily by various industry groups either opposed to ratification, or staking out negotiating positions.
Such analyses have their place - and their limitations.
Climate change policy is an exercise in risk management, not accountancy. The short-term costs of action on climate change can be roughly estimated, but the costs of doing nothing, while undoubtedly large, are virtually impossible to quantify.
Good risk management entails several obvious stratagems, including emission reduction, energy efficiency, research and development, contingency planning and an effort to define and capture the business opportunities of the post-Kyoto business environment.
The business community would serve its own interests best by thinking ahead on these issues. The Government needs the considered input of business. That is how we will maximise the benefits and minimise the costs.
* Pete Hodgson is Minister of Energy and convener of the Ministerial Group on Climate Change.
Intergovernmental Panel on Climate Change (IPCC)
United Nations Environment Program
World Meteorological Organisation
Framework Convention on Climate Change
Executive summary: Climate change impacts on NZ
IPCC Summary: Climate Change 2001