Climate trade-offs

If there seems a new gravitas about Climate Change Minister Nick Smith, it is because he, and the rest of the Government, must set their position on a most pressing issue: climate change.

On August 10, in Bonn, Germany, New Zealand is scheduled to table its policy on a targeted reduction of greenhouse gas emissions for 2020 - building towards the Copenhagen conference at the end of the year when there will be an attempt to hammer out a global climate-change mitigation agreement to succeed the Kyoto Protocol.

To this end, Dr Smith and his partner in such matters, Trade Minister and Associate Climate Change Minister Tim Groser, have been on the road consulting the public.

Their task was given impetus, and a confusing twist, by a recent report to the Ministry for the Environment prepared by the New Zealand Institute of Economic Research (NZIER) and Infometrics - "Macroeconomic impacts of climate change policy".

This has been touted as providing an indication as to the relative costs of various domestic emissions reduction levels.

But as the document itself says: "To be clear, this report investigates the impact of changes in New Zealand's AAUs [carbon credits] under the framework of an international agreement whereby New Zealand takes responsibility for any emissions above a given amount.

This is not the same as investigating different domestic emissions targets and should not be interpreted as such."

Greenpeace has called for cuts to 40% of 1990 levels by 2020.

Dr Smith has said that is neither achievable nor affordable, and that it was better to err on the side of realistic goals.

In offering the material for general consumption, his office appeared to suggest the NZIER report indicated achieving a position of minus 40% relative to 1990 levels would cost $3000 per capita per year.

This is, at best, a simplification of an extremely complex issue: the figures, and assumptions, have been challenged by Greenpeace, the Labour Party, and independent commentators.

Regardless, it is notable in all this how the terms of the debate have evolved.

It is only a short few years since Prime Minister John Key intimated to the House that he was a climate-change sceptic.

Earlier this year, Rodney Hide, leader of National's coalition partner Act New Zealand, called for - and got - a select committee investigation into the science of climate change.

He has been silent on the subject of late.

And in the discussion document prepared to accompany the ministers' roadshow, Mr Groser says: "We are working hard in international negotiations to achieve a post-2012 pact where New Zealand does its fair share as a developed country in addressing this global problem."

Predictions suggest the Government is likely to settle on somewhere between 15%-20% domestic reductions.

This will be too little for some and too much for others: moral and environmental imperative versus economic cost.

Proponents of the former say bold reduction targets carry built-in benefits.