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Business response to climate change needed

8 September 2006

Business response to climate change needed to avoid slipping behind global competitors

New Zealand business risks missing the boat if it doesn't start preparing to manage climate change.

The Chief Executive of the New Zealand's Business Council for Sustainable Development, Peter Neilson, has warned a business climate change symposium in Wellington that businesses here could find themselves unprepared and have their competitiveness damaged if they don't plan a climate change response now.

"There are people who say we shouldn't do anything, that other countries can be more effective in controlling emissions and trying to prevent damage predicted from global warming.

"We should act proportionately to do our part as a country to reduce emissions," Mr Neilson says. "We shouldn't assume we're too small to be noticed. The green miles argument (based on an incorrect assumption) is being used against New Zealand apples.

"European farmers, paying for carbon going into the atmosphere, are not going to hold back on seeking a carbon tax at the border on countries that are not doing their bit."

Most countries expected a price to be put on carbon. In the United States in the past week, cross party state agreement had been reached in California for a bill to cut emissions by 20%. Carbon trading regimes were being considered by other US states, at a state level in Australia, and already applied across Europe.

"There are complex issues in deciding what sort of carbon trading regime we should have. Any approach needs cross party support for the mechanism and for the need for emissions to reduce at some point.

"But when we have a price on carbon, businesses will react to avoid the cost, and reap the benefits. Major technology developments, like the hybrids, came out of the last oil shocks. Major new technology and profitable opportunities will come from the climate change shock."

The issue producing opposition to climate change management in the United States, China, Australia and India was not that people there did not believe climate change was happening and that it was man made, but that they are so highly dependent on high-emission coal fired electricity generation. They need a technical solution, to capture and store emissions from coal use, before they can respond realistically. Similarly, New Zealand needs a breakthrough on managing our largest source of greenhouse gas emissions, methane from sheep and cattle. There is every hope that the research now under way will find one.

"Even if we don't quickly find a cost-effective remedy we do need to show we are taking reasonable steps to manage the issue," Mr Neilson says.

Meantime, the public believes climate change is happening, and so do business decision makers, according to Business Council research.

As a result, Government would respond.

"It's right the Government is taking its time to work out the right responses. Business doesn't need two more false starts, like the abandoned fart and carbon taxes.

"The response also needs to address New Zealanders' real concerns. For example, the compelling case for incentives for planting forests on erosion and flood prone land, which also act as carbon sinks. The Government's announcement last week to do this will enjoy major public support.

"The country first needs to do things we should do anyway, which improve health, preserve the environment and lift the quality of life, while also reducing emissions."

The Business Council would like to see policies like:

• Cash incentives of up to $3000 paid to people buying low emission, fuel efficient cars. The policy will see more than 430,000 climate friendly vehicles enter the national fleet over five years. The petrol savings over those vehicles' 13 to 20 year fleet life would exceed $3.5 billion (at today's petrol prices) • Mass insulation of more than 400,000 drafty homes, causing major health problems, specially for the elderly and children. Energy savings will lead to emissions reductions – a climate change measure.

Mr Neilson says the Business Council is recommending a raft of similar and highly popular policies to the Government – which would see the country embrace huge benefits by properly managing climate change.

"Kiwis are sick of Kyoto and are turned off by all the doomsayers on climate change. They will turn on to a positive, practical approach which improves our health, safety, air quality – and lets us do our bit to cut emissions. The business opportunities imbedded in this are huge.

"We've got to look past those who say it's not happening, who then say we should not do our bit as a nation to help avoid a global problem with massive consequences for every citizen.

"The British Antarctic mission this week tells us CO2 levels are at their highest in 800,000 years. We don't know at what level the world reaches a 'tipping point' beyond which any action we take to manage global warming becomes harder or impossible. But the 'Antarctic climate canary' is chirping. A UN-assembled panel of more than 1500 scientists is warning us.

"It's a bad business advisor who says you can carry on increasing emissions, fail to do your bit for New Zealanders and the world – and expect your competitors, and the consumers in countries which take climate change seriously, to let you go unpunished. We should go for the rewards of acting prudently now," Mr Neilson says.


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