Squirming Environment Secretary spells out climate challenge

Analysis: James Palmer paused. “So,” he said, followed by a long exhalation. “Gosh, there’s lots in that question.”
On Thursday, Palmer, the Secretary for the Environment (the chief executive of the Ministry for the Environment – MfE), appeared before the Environment Select Committee, comprising a mix of Government and opposition MPs. He had just given his agency’s projection – “dynamic variables” aside – that the Government was on-track to meet its greenhouse gas emissions budget targets.
Green Party MP Lan Pham noted the ministry considers the intergenerational implications of decisions, and asked its view of acting now on climate change, in an intergenerational sense, rather than later. Cue Palmer’s pause, exhalation and squirming “gosh”. “We’ve got a couple of hours,” a select committee member quipped. Someone else interjected: “Good question!”
It’s easy to imagine the pressure on Palmer’s answer.
His preamble talked about the upending of its work programme, such as the repeal of the previous government’s Natural and Built Environment Act and its sister act, Spatial Planning, and the introduction of the new Government’s Fast-Track Approvals Bill. This is what new governments do.
At its peak, MfE had 1230 full-time equivalent jobs – now there are 516 fewer. Many of those were vacancies, but there were 278 redundancies, and 148 fixed-term contracts ended early. More than 700 staff had to re-apply for their jobs. The net saving over four years is $617 million – with a 34.5 percent cut to the departmental baseline budget.
The ministry had been through “amazing change”, Palmer said, while delivering a full work programme. He may well be bracing for more change, and priority pivots, in the coming years – so in answering Pham’s question he chose his words carefully.
“At one level,” Palmer started, seeking inspiration above his eyeline, “if you took the view that New Zealand and, indeed, the global community needs to do everything possible to reduce emissions, you could throw a lot more money at emissions reduction, and you could impose a lot more costs on businesses and households.”
(Note the callousness conjured up by the idea of throwing money, and its direct association with increased costs – which fits the Government’s narrative of inheriting a financial mess from a big-spending Labour Party.)
Every government, including this one, juggled a set of competing priorities, and a complex set of policy considerations, with intergenerational consequences, he said. Palmer mentioned “economic performance”, and delivering outcomes for “households, etcetera”, before adding “health, welfare”.
“There are many things that contribute to intergenerational wellbeing so the Government needs to weigh all of those and develop a set of priorities.”
This is undoubtedly true. This Government certainly has different priorities from the previous one. Regarding the fast-track, Palmer suggested, at one point, the legislation placed a high priority on a project’s national and regional importance, which meant projects previously rejected on environmental grounds may well be approved.
Palmer continued: “In the ministry, thinking about the intergenerational nature of climate change, we don’t think about it just in terms of emissions and the physical effects of climate, we think about it in terms of whole societal wellbeing, and the costs imposed of the policy choices that are made.”
Again, this seems a fair comment. However, some – like Green MP Scott Willis, in response to Palmer – would argue the threat of climate change is existential, and will affect society, and its wellbeing. More on that later.
The Government’s “well canvassed” approach is “least-cost”, Palmer said, recognising the current fiscal and economic cycles. “The ministry sees climate action as being important. It is urgent. But in a society with many competing demands it needs to be considered alongside all of those.”
(Using that framing, it could be argued that climate action should only compete with other urgent demands.)
Palmer then praised, and criticised, the Paris climate agreement targets, calling them ambitious but noting increased emissions “is implied and accepted by the Paris targets”.
“We anticipate that climate change is going to continue to accelerate and intensify, as a result of the transition occurring globally and domestically, and therefore we need to be working on the adaptation elements as well.”
Pham, the Green MP, pressed Palmer. Isn’t investment now better than making it later?
The MfE boss said his ministry had been on the record for a long time saying earlier action on climate was more cost-effective than investments made much later. That’s the orthodox, historical economic analysis, he said, but there are caveats.
“Every dollar of cost imposed on the economy does come with an opportunity cost. You can look at the climate question in entire isolation and think about what does a dollar now versus a dollar later on mitigation alone look like, in terms of its benefit.”
It’s not a straightforward choice, he said. A dollar for climate now is weighed against “a dollar for health, for education, for something else as well … It’s part of a broader consideration of how the government optimises its expenditure in all the things in a discrete and finite budget it has to balance and meet.”
Political choices need to be put into context.
The size of discrete and finite budgets are a choice. Last month, a group of economists said the Government’s fiscal policies, of cutting the public service and cancelling infrastructure projects, were making the recession worse.
(Finance Minister Nicola Willis hit back about “unclear reporting” on public sector job losses.)
And while a “least-cost” approach sounds good in theory, the people of Otago and Southland might have a different view when it comes to Dunedin’s new hospital. Also, the people of flood-prone South Dunedin (or Westport, or Hawkes Bay) might have some expectation that governments – local, regional and central – will put money aside to help fix a well-known, well-researched problem, affecting their wellbeing.
Framing $1 spent on climate as competing with $1 on health or education is just that, framing. Fiscal responsibility is important but as Palmer said himself, it’s about priorities.
New Zealand is already an international outlier when it comes to climate, with our reliance on tree-planting to offset our emissions, the exemption of farming from the emissions trading scheme, and scant action on emission reductions compared to other OECD countries.
Now, while the Climate Change Commission is suggesting a stronger 2050 methane target, and a carbon-negative goal, is affordable and achievable, a Government-commissioned review says we should water down our methane targets.
To meet our Paris targets, New Zealand is likely to have to buy billions of dollars’ worth of overseas carbon credits – a liability yet to appear on the Government books. (When to include that is Treasury’s job, Palmer said on Thursday.) Isn’t it the job of agencies like MfE to advise the Government of the fiscal prudence, or otherwise, of drastically lowering emissions to make that potential liability smaller?
Then there’s the human toll. We’ve already had a taste of climate change’s killer effects, through Cyclone Gabrielle, and widespread damage from other extreme events. It makes sense, surely, for New Zealand to reduce emissions to encourage stronger international action in an attempt to keep global heating to a minimum.
Without it, we’re facing dangerous heat, monster rain storms, floods, and sea level rise. Already, houses, roads, and rail infrastructure are being threatened, popular tracks are being wiped out, and fertile farmland damaged.
At the select committee hearing on Thursday, Green MP Scott Willis asked Palmer about the balance between spending on emissions reductions versus health and education. The climate crisis is an urgent, existential question, he said, with massive impacts on society.
Questions of balance and value judgments aren’t for the ministry, Palmer said. He was just observing the challenges governments were confronting with spending decisions, and the juggle of competing priorities.
“There will be those in the community who are of the view that a greater level of action on emissions reduction is more important, both in the short and long term, than a dollar spent on health. There will be people in the community who have a different view of that.
“And it is the role of the electoral process, and the role of Government, to weigh up those different societal preferences, and reflect those in decision-making.”