In a burst of messianic environmentalism, the Government has committed itself to ratifying the Kyoto Protocol on Climate Change by next September. It seems undeterred by the reluctance of the United States, the world's largest emitter of greenhouse gases, to sign an agreement that would be far from global. Only developed countries would be obliged to reduce their emissions, to an aggregate 5 per cent below 1990 levels by 2012. Nevertheless, the Prime Minister has said, "We must lead by example".
Progress on the Kyoto Protocol, halted by intransigent European ministers at The Hague last year, was revived at a conference in Bonn and refined at Marrakesh. The Europeans, who had probably been banking on a Gore presidency in the US, were sobered by the Bush Administration's abrupt withdrawal from the process. They have agreed to the emissions trading mechanisms they once lambasted as "loopholes".
Energy Minister Pete Hodgson has returned from Marrakesh with his mission rekindled. Last month, he held meetings with industries throughout the country to acquaint them with what he calls "the challenges and opportunities" of climate change. Having heard him, industries were moved instead to organise a pressure group to resist the Government's rush to ratify the protocol.
Today a coalition of some of those industries has released an economic assessment of the impact of proceeding with the Kyoto Protocol. It should be enough to make the Government think twice. The NZ Institute of Economic Research (NZIER) has put the Kyoto options through its model of the New Zealand economy and found that there would be an initial loss of growth overall, followed by a recovery that would nevertheless put the country on a lower path of growth than it looks to be on now.
In 15 years, New Zealand's GDP would be 18 per cent lower than it would have been without greenhouse gas emission restrictions. There are bound to be quibbles with the assumptions and method of the calculations, but at least for the first time somebody has ventured to estimate the costs of Kyoto. Without an idea of the costs of trying to contain global warming, it is impossible to say whether the illness is worse than the cure. The climate change debate has moved past the point of dispute over the human contribution to the warming of the atmosphere. There is no longer much dispute, either, that there will be positive as well undesirable consequences of warmer temperatures in most places. The industry lobby acknowledges that the trend presents a problem and that New Zealand should play its part in tackling it. But not, the lobbyists say, by getting ahead of the play.
