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Speech: Smith - Bluegreens Forum 2011

Bluegreens Forum 2011

Keynote Speech

Mt Vernon Lodge, Akaroa

This 12th Bluegreens Forum in the beautiful coastal and heritage village of Akaroa is a landmark in our work to advance our ideals for a cleaner and more prosperous New Zealand. This morning I want to do some thank yous, I want to reinforce the values we have developed and advocated for a decade, and I want to make some important Government announcements on the environment.

First to Amy Adams and Sharon from her Selwyn team, who have been of huge assistance to the Bluegreens executive in hosting this Forum. We appreciate that, despite the huge Canterbury Earthquake in September and the workload and stress that this brought, you have persevered in hosting this important event.

Secondly, I want to acknowledge the Bluegreen National Executive, particularly Andrew von Dadelszen who has capably led this organisation for over six years, his deputy Peter Turner and our treasurer Margaret Voyce. These are volunteers who give of their time, effort and not inconsiderable personal expense to advance our Bluegreen values for National and for New Zealand.

I want to also acknowledge the Bluegreen Caucus Committee led by Christchurch MP Nicky Wagner. The Bluegreens Caucus began with just Simon Upton, now OECD’s Environment Director, and myself in 1998, but now involves a capable group of 18 MPs.
Finally, I wish to thank our broader membership here today. From our longest serving and founding member Rob Fenwick to our most recent recruit, Maggie Barry. Bluegreens is not about any one person but about a set of values and ideas that we believe will build the sort of future that we want for our country.

A fortnight ago for my daughter Hazel’s thirteenth birthday we climbed Mt Angelus in the Nelson Lakes National Park. That night at the hut on the shores of Lake Angelus, we struck up a conversation with overseas visitors. They were in awe of the crystal clear lake water, the stunning Southern Alps and the unpolluted night sky. This country is naturally blessed in so many ways, and this heritage is something we must cherish for future generations.

Bluegreens are equally passionate about our nation’s economic success. It is our water, our fertile lands, our forests and our oceans that underpin so much of the wealth we need for New Zealanders to have jobs and good incomes, the funds we need to provide quality health care, education and retirement incomes. Our most important founding principle is our belief that successful economic and environmental policy can and must go hand in hand.

It is this that is driving our freshwater management reforms, our approach to climate change and reducing greenhouse gas emissions, our changes to the resource management act, and the Government’s announcements that we are making today on air quality, green growth, biodiversity, marine protection and long term emissions reductions.

A second core policy of Bluegreens is that proper pricing is essential to getting better economic and environmental outcomes.

Take waste. I started my political career on the Rangiora District Council in the 1980s when the dominant thinking was that tip charges had to be kept as low as possible or free to avoid illegal dumping. People paid for it via their rates regardless of their waste. There was absolutely no incentive for recycling or resource recovery. It was flawed environmental and economic thinking that has gradually changed to user or polluter pays.

We talked about the better financial incentives on waste in our 2006 Bluegreen Vision and in July 2009 introduced the $10 a tonne waste levy. This levy is helping support new recycling initiatives all over the country.

In Dunedin we launched a new anti-freeze recycling business. In Canterbury, Envirocomp, which is recycling disposable nappies and who will present later this morning. In Nelson, recycling the thousands of tonnes of mussel shells previously dumped. In Rotorua, solid sewage into plastics and in Auckland, tyres into biofuels. Our Bluegreen ideas are in practise driving innovation and new green business.

It is this same important principle of pricing signals that has driven our introduction of the emissions trading scheme last year. All of the domestic and international advice is consistent in arguing that a price based mechanism is the most efficient and least costly way to reduce emissions. Yes, it is complex and controversial, but after 20 years of policy merry-go-rounds, we are making progress on the most challenging environmental issue of our generation.

I don’t pretend the emissions trading scheme is popular, but the price signal is delivering exactly the change we need to make as a country.

I think every New Zealander would prefer our power was produced by renewable sources, yet over the past 20 years the biggest percentage increase in emissions has come from thermal power generation, up 120% since 1990.

The last decade has seen most of the new generation being thermal, like the large E3P generator at Huntly and the new oil powered station at Whirinaki built by the previous Government.

Last year we saw 800MW of new generation consented – 45% geothermal, 40% wind and 15% hydro; all 100% renewable. This is a marked and positive shift.

A crucial objective of the ETS has been to reverse the record deforestation that occurred in Labour’s last years. Again it is working. We’re seeing substantial new areas, particularly poor quality land with erosion risk, going into trees with the financial incentives our ETS is providing.

We’re also vigorously taking these Bluegreen ideas into the global debate on climate change. Climate Change Negotiations Minister Tim Groser has initiated an alliance of nations pushing for the removal of the billions of dollars of subsidies that go to fossil fuels internationally. Many of you will be aware of the $100 billion per year fund negotiated at Cancun to help fund climate change assistance for developing countries but are probably not aware that the world spends at least four to seven times this sum subsidising fossil fuels. It is ridiculous and incoherent to be negotiating cuts to emissions while also subsidising them, and Bluegreens can be proud of the work Tim is doing to advance this global debate.

A third key idea we Bluegreens have promoted is a more collaborative approach to environmental issues. New Zealand has been the loser in the very divisive and polarised debates we have seen on so many environmental issues. This thinking has been heavily influenced by the Foundation of Research Science and Technology funded programme on the Nordic countries led by Guy Salmon. This thinking has driven the very constructive work on freshwater management in 2010 by the Land and Water Forum on which you will hear from Alistair Bisley very shortly and has also been picked up with the Canterbury Water Management Strategy.

Jacqui Dean will today be talking about how this new approach might be a way forward for resolving long and protracted debates in the iconic McKenzie Country.

Bluegreens have also argued for a strong scientific underpinning to our approach to environmental policy.

This is what has driven the new Global Research Alliance on Agricultural Greenhouse Gas Emissions. We’ve got this massive global issue of how we feed an additional three billion people projected by 2050 without increasing emissions. We’ve been able to secure over $200 million for this international research programme and make it a top priority in our own budget.

It is also why we have put our support behind the new Waterways Centre for Freshwater Management launched by Canterbury and Lincoln Universities.

Science and technology will be crucial to helping us find solutions to problems like climate change, freshwater management and air quality.

The last and equally important dimension to Bluegreens has been about being practical and pragmatic. Theories are fine. It’s results that matter.

That is why we’ve put $347 million into home insulation. It’s buffered builders during the recession. 76,000 New Zealand homes are warmer, dryer and healthier. It’s improved energy efficiency and it’s reducing greenhouse gas emissions.

Another pragmatic bluegreen initiative has been the $50 million investment in the national network of cycleways. These great rides from Hokianga in the North to Queenstown Lakes in the South strengthen New Zealand’s tourism brand as well as providing economic and environmental benefits.

We are ramping up efforts to clean up New Zealand’s polluted waterways. We’re programmed to spend $92 million over our first five years, five times the amount spent in the preceding five years, on initiatives to clean up the Rotorua Lakes, Lake Taupo and the Waikato River. We also doubled the funding for the Landcare Trust so as to support practical farmer driven initiatives to improve water quality.

We’re also proud of the incentives we have put in place to kick-start electric car uptake in New Zealand and the grant schemes for household solar water systems extended last year to also include hot water heat pump systems.

I’ve covered a lot of what Bluegreens stand for and what we’ve achieved in our first two years in Government. I now want to turn to the important issue of air quality and to announce the new National Environment Standard.

Clean air is as fundamental to New Zealand’s clean green lifestyle as clean water, wild beaches, gleaming white mountains and rich green forests. Images of grey smog hanging over Auckland and Christchurch are not consistent with our 100% pure tourism brand. We can and should have some of the best air quality in the world given our geographic isolation.

This is an important health issue. Fifty percent of New Zealand’s population covering 27 urban areas like Auckland, Christchurch, Hamilton, Rotorua, Nelson and Timaru live in polluted airsheds that adversely impact on health.

The issue here is fine particulate pollution from fires, from cars and from industry that when inhaled do permanent damage to our lungs and hearts contributing to strokes, heart attacks, cancer, lower birth weights and increased asthma.
The best estimate of annual premature deaths from air pollution is 1640 per year or about four times the road toll.

We measure particulate pollution as the number of times an area exceeds a particular concentration in any year. The problem ranges from Timaru, which has averaged 39 exceedances, to Christchurch at 21 and Napier at four exceedances a year.

For Auckland, it is interesting to compare their five exceedances a year average with Sydney and Brisbane on two and three. If the Queens City is to be competitive with its Australian counterparts, its air quality needs to be as good or better.

The majority of this pollution comes from home fires and the remainder from industry and vehicles. In the badly polluted airsheds it’s over 80% from home fires, although in Auckland this is 60% with a bigger contribution coming from vehicles.

Fixing this problem comes with an economic, social and political cost. People need home heating and many love the ambiance and warmth of a natural fire. Tougher vehicle and industry standards come at a cost to consumers and businesses. The tough questions are what the standard should be, how much should we leave to regional councils, how long should we take to clean the air and where should the cost fall.

Let me give a little of the history of where this important issue has got up to date. In October 2004, the previous Government adopted a new air quality standard requiring all regional councils to have no more than one exceedance per year in particulate pollution by 2013. The penalty for non-compliance is that no new or existing consent for industry can be issued after that date.

It is the penalty regime and timetable that has caused great angst. Few of the polluted airsheds will comply by 2013 with the standard of only one exceedance per year.

The implications for jobs of this non-compliance are dramatic and draconian. It means if any industry seeks a renewal of an air discharge consent after 2013 in these areas, no consent can be granted – end of story. This would impact on over 180 industry consents and put about 17,000 people out of work. The acute unfairness of the policy is that although households and vehicles produce the bulk of the particulate pollution, it is only industry that faces any penalty for non-compliance with Labour’s 2004 regulation.

In our Bluegreen Vision document in 2006 we proposed a review of the standard, a policy National committed to at the 2008 election. In 2009 we established a Technical Advisory Group which proposed significant changes and in 2010 we consulted on these with the release of a discussion document in June. There has subsequently been a great deal of analysis by Ministers and officials on the right way forward.

The good news on this issue is that technology is providing quite affordable solutions. The shift from an old open fireplace to an approved log burner reduces pollution by 88% and to a pellet fire by 95%. The improvements in vehicle technologies are basically halving the particulate pollution with each new standard. In the three year term of this Government, the acceptable particulate pollution from a used import will reduce by 90%. Similar changes are being made for new and heavy vehicles and fuel standards are also being tightened.

The same sort of technologies are also having a dramatic impact on industry emissions. The new OI Glass furnace opened by Prime Minister John Key produces only 1%, or a reduction of 99% of the particulate pollution, of the old engineered glass furnaces. These reductions are being achieved with the regular renewal of air discharge consents required under the Resource Management Act, albeit no renewal at all would be allowed under the existing policy post-2013 for even a minute amount of pollution.

We’ve struck a careful balance in our new plan for clean air between achieving clean air as quickly as is practical without imposing excessive costs on households and businesses.
The policy of every area having to achieve no more than one exceedance per year by 2013 is unrealistic.

We are going to give moderately polluted areas, like Auckland and Napier, i.e. with under ten exceedances a year, until 2016 to reach this standard.

For those higher polluted areas like Christchurch, Timaru, Rotorua and Nelson with over ten exceedances a year, the new standard will require they get under three by 2016 and be fully compliant by 2020.

This pragmatic approach of a split target recognises that some communities have a far more difficult challenge than others. There is nothing to stop Councils wanting to achieve these targets more quickly. We are also pragmatically excluding from the national standard exceedances caused by volcanic eruptions, Australian bush fires and dust storms as these are beyond communities’ control.

This policy has been strongly influenced by cost-benefit analysis. It is true that there is some loss of health benefits by giving more time to reach the standard – a drop from $1911 million to $1746 million. The real shift is that the costs are reduced from $867 million to $196 million. This is because we are not forcing a whole lot of business closures and it is a lot less expensive to replace a non-compliant wood burner at end of life. The analysis shows the change of policy improves the net present value by half a billion dollars and the benefit to cost ratios from 2.2 to 8.9. This is a distinctly Bluegreen approach in which we are seeking the optimum mix of environmental and economic outcomes.

We need to do more than just set standards. We also intend to apply some new national rules to help achieve these improvements in air quality.

From 1 September 2012, new open fireplaces in areas with poor air quality are to be prohibited I stress this ban is on new open fires only in those areas that have a pollution problem. Some Regional Councils in areas with air pollution problems already have such a rule, but this applies to all areas where there is a problem.

From 1 September 2012, we are going to require mandatory offsetting for any new significant industrial consents in polluted airsheds. This will replace the arbitrary 2013 ban on consents that would have been so costly on jobs. This new approach is very Bluegreen in that it allows industry to grow and expand providing there is no net impact on air pollution. Therefore they must offset any increase by funding an equivalent number of households to change domestic heating.

This measure applies only to new consents. Renewal of existing consents will be processed by Regional Councils in the normal way with Regional Councils able to require industry to meet the best practise standards in minimising industrial pollution. The record of these renewals to date is substantial improvements and reduced pollution.

The Government is also moving to reduce air pollution from vehicles by toughening up on vehicle emission standards on both second hand imports and new vehicles, as well as progressing improvements in fuel standards.

The other key component of this policy is our Clean Heat and Warm Up New Zealand programmes to actually help households convert to low or zero polluting heating. We’ve helped fund 20,000 conversions in just two years, as compared to just 800 during the nine years from 1999 to 2008.

There is another important step the Government is taking to improve air quality. It would be obvious to you that in terms of population size and severity of poor air quality, some of the biggest gains are to be made in Christchurch. The September 4th earthquake has provided an opportunity to rebuild a cleaner and greener Christchurch.
As both Environment Minister and an earthquake engineer, I rate brick chimneys as a pet hate. It is noteworthy that the only serious injury from the Christchurch earthquake was from a toppled chimney. Likewise with the earthquakes in Inangahua, Murchison and Napier, the biggest killer was brick chimneys. We could do much for the health and safety of New Zealanders by replacing as many as possible. For those concerned about heritage features, you might not know that the architecturally significant chimneys of the old Government buildings in Wellington are actually made of polystyrene foam.

There have been 30,000 claims for chimney damage in Christchurch and the EQC is working in partnership with the Energy Efficiency and Conservation Authority to replace as many as possible with efficient flued gas space heaters, approved wood burners, pellet fires and heat pumps. Over the next two years, this programme is expected to cost $100 million and will make a significant difference to Christchurch air quality. It is the silver lining to Christchurch’s tragic earthquake.

The last important aspect of our decisions on the National Air Quality Standard is the reporting and compliance measures. To monitor progress towards achieving these 2016 and 2020 goals, regional councils will be required to report annually on the progress they are making. It is in the national interest that these air quality standards are achieved and part of this policy is an ongoing compliance strategy.

These Cabinet decisions announced today on air quality are being translated into a new Air Quality National Environment Standard by Parliamentary Counsel that will be adopted in the next couple of months.

This is a very Bluegreen approach to improving New Zealand’s air quality. It’s economically and environmentally rational. It won’t put thousands out of work. It’s pragmatic. It targets air pollution fairly from all sources. It is an achievable plan to ensure our air quality measures up to our clean green values as a nation.

Thanks for all your contributions to the Bluegreens. We are making a difference in so many areas. I look forward to engaging with you during Forum 2011. Our work has just begun.


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