What are the risks?

New Zealand's environment, economy and sense of community are at risk, say a new grouping of concerned citizens. They say it is Parliament's job to assess those risks and take action.

Risks to New Zealand's way of life may be building without any assessment of what needs to be done to head them off, according to a group of concerned citizens.

The group, which includes well-known public figures, eminent thinkers, writers and artists, health professionals, educators and business people, is calling for Parliament to assess the risks in order that responses, if required, can be made in good time.

The nucleus of the group is based in Otago, and includes botany professor Sir Alan Mark, poet Brian Turner and energy expert Associate Prof Bob Lloyd. The signatures of 100 prominent New Zealanders from around the country now back the appeal for a risk-assessment project.

Their call for the work to start is being launched this week.

Group member Dugald MacTavish, a water resources consultant, says concern about the sustainability of the path the country is on grew out of discussions prompted by generators Contact and Meridian investigating further hydro-electric development. It seemed that the wider context was not being discussed: Why was more generation always required? What is implied for our environment. Is the country using the energy we have now sensibly?

Links between the way energy is used and symptoms of environmental and social stress - climate warming, sea-level rise, ocean acidification, social instability, stressed ecosystems, flat crude oil production, increasing indebtedness - seemed to require discussion too, Mr MacTavish says.

The organising group decided the best course was to ask the nation's leaders to together formally assess the risk.

The group is launching its ''Appeal to Parliament'' in Dunedin on Friday afternoon and evening, and says risks should be assessed in five areas.

1. Economic security: the risk of a sudden, deepening, or prolonged financial crisis.
2. Energy and climate security: the risk of continuing our heavy dependence on fossil fuels.
3. Business continuity: the risk exposure of all New Zealand business, including farming, to a lower-carbon economy.
4. Ecological security: the risks associated with failing to genuinely protect both land-based and marine ecosystems, and their natural processes.
5. Genuine wellbeing: the risk of persisting with a subsidised, debt-based economy, preoccupied with maximising consumption and GDP.

The following six personal perspectives from supporters of the appeal address the key risk areas, arguing that symptoms already apparent combine to suggest ''a profoundly unsustainable human dynamic'', Mr MacTavish says.

 

1. ECONOMIC SECURITY:
The risk of a sudden, deepening, or prolonged financial crisis.

Lewis Verduyn, monetary system and jurisprudence researcher, Wanaka.

The Global Financial Crisis has tipped the world into an era of painful austerity. Politicians tell us that budget cuts are needed to revive our economy. But history reveals that whenever deficits are reduced, the money supply also shrinks, leading to recession. Government austerity, rather than alleviating hardship, further reduces the money supply, which further reduces demand for goods and services, which further reduces employment. Former World Bank chief economist Joseph Stiglitz recently described the European Union austerity plans as a ''suicide pact''.

New Zealand is now experiencing many of the symptoms of austerity, including business failures and redundancies, rising poverty, and increasing pressure on social services. Export margins are declining because of the high New Zealand dollar. Food-banks are struggling to keep up with demand. There are fewer full-time jobs, and Kiwis continue to head overseas in search of work.

Lewis Verduyn
Lewis Verduyn
Our fragmenting economy is connected through our banking system with the distressed economies of Europe, where economists are not debating if the Euro will break up, but how and when it will happen. The European Central Bank may refuse to be the lender of last resort, or rampant unemployment may trigger political unrest, but in any event the markets are highly volatile and an end of the Euro would cause severe disruption to the global economy.

According to academics Geoff Bertram and David Tripe, the Reserve Bank of New Zealand and our mostly foreign-owned commercial banks are working on a plan for what is innocently named Open Bank Resolution. Under this plan, in another financial crisis, instead of the taxpayers bailing out a bank, customers would lose a percentage of their deposits in what is called a ''haircut'', which could literally happen overnight. This plan will be in place by June 30.

Are New Zealanders willing to accept a deposit ''haircut'', followed by even more severe fiscal austerity? Or should our government be exploring the best options for securing a stable and sustainable banking system? An International Monetary Fund report called The Chicago Plan Revisited presents a strong case for monetary reform. This plan, which is gaining support at the highest levels, would ensure a steady supply of public money that is not created as debt by private bankers, thereby avoiding the need for a haircut or austerity.

We must urgently prepare for our economic security. It is the duty of our government to initiate and support reforms that will protect ordinary New Zealanders from demonstrable risk.

 

2. ENERGY AND CLIMATE SECURITY:
The risk of continuing our heavy dependence on fossil fuels.

Bob Lloyd, Associate Professor, Department of Physics, University of Otago.

Exploring the risk to society of continuing our heavy dependence on fossil fuels is a bit like exploring the risk to the world food system due to the expanding world population. Energy use and the existence of our complex society are intrinsically linked. In fact, the only reason that our complex civilisation is possible is by virtue of the consumption of large quantities of available energy.

There are even fundamental laws in physics, the laws of thermodynamics, which assure us that complex systems need to be fed with energy to keep them from dissolving into chaos. Energy is unlike other inputs to society, as energy cannot be recycled and once the energy used to extract an energy resource, such as oil, becomes close to the energy gained when it is utilised, then the extraction becomes pointless (i.e., when the energy returned on energy invested or EROEI becomes less than one).

Bob Lloyd
Bob Lloyd
At present more than 85% of society's energy use comes from fossil fuels: oil, gas and coal; of which oil is currently the most important fraction. This leads to two basic problems. Firstly the fossil fuels are all finite and when they start running out the complexity must decline and along with the complexity our civilisation and its current high population. Secondly the fossil fuels all give up carbon dioxide when they are used and the increase in atmospheric carbon dioxide will cause the earth to warm; again this increase is due to fundamental physical laws. Thus we have the two problems of global warming and peak oil.

A recent report by the UK Department of Energy and Climate Change indicated that the medium-term risks due to peak oil will include increased fuel costs and reduced demand for fuels, both of which might be expected. But they also listed a range of economic effects including: higher unemployment, a fall in consumer and business confidence, a fall in tax revenues and downward pressure on GDP.

All of these are happening in New Zealand and the world at present. There is no coincidence that energy consumption and GDP growth have both stalled in New Zealand in recent years. In addition, the report listed more serious societal impacts including social unrest, resource nationalism, increased geopolitical competition for resources (wars) and finally, a greater emphasis on security of supply over climate change mitigation.

Again these are all happening in the world, albeit not so far in New Zealand. Except for the last point; which is of concern as the alarm concerning the impacts of climate change are also accelerating, with many sources suggesting the consequences will be far worse than thought even five years ago. The risks due to climate change mirror those of peak oil, and include economic unrest and population decline due to agricultural disruption and sea-level rise. The long-term risk of climate change is of course that of the very existence of our species.

 

3. BUSINESS CONTINUITY:
The risk exposure of all New Zealand business, including farming, to a lower carbon economy.

Bryan Gould, chairman of the National Centre for Tertiary Teaching Excellence, former vice-chancellor of Waikato University and former chairman of the Foundation for Research Science and Technology.

The New Zealand economy has been characterised for some time by a slow rate of growth, high unemployment, low rates of investment and productivity growth, persistent trade deficits, a perennial need to borrow overseas, a propensity to sell off assets - including national assets - into foreign ownership, high levels of import penetration, a weak export sector, and low rates of return on investment and therefore of profitability. These are all hallmarks of a fundamentally uncompetitive economy.

Sadly, one further characteristic of an uncompetitive economy is an inability to respond to new challenges and a reluctance or inability to take advantage of new opportunities. These deficiencies are sure to become more serious in respect of two changes that will become more apparent and pressing in the immediate future - the increasingly short supply and therefore higher price of fossil fuels, and the growing pressure to reduce carbon emissions in the interests of restraining global warming.

Bryan Gould
Bryan Gould
New Zealand business shows little sign of understanding the imminence of these changes or of recognising the challenges and opportunities they present. We make few efforts to become more fuel-efficient or to develop new sources of energy that do not rely on fossil fuels. We continue to pin hopes on the discovery and exploration of new fossil fuel reserves as the way forward to future economic success.

We do not understand the need, on cost and competitiveness grounds, to keep pace with other economies as they make progress in these areas, nor do we see the potential for developing new technologies like biofuels as a new range of products for our primary production industries.

It is not only the move away from fossil fuels that we have failed to grasp. We continue to exempt our farming industries from the moves being made worldwide to restrict carbon emissions. Our government shows no sign of urgency and continues to put the issue on the back burner. Despite the threat that emerged from the ''air miles'' scare, we seem unaware that our ability to sell premium food and other agricultural products into international markets depends hugely on maintaining our ''clean green'' image and our reputation for environmental responsibility.

A national risk assessment is essential if we are to treat these issues with the seriousness they demand.

 

4. ECOLOGICAL SECURITY:
The risks associated with failing to genuinely protect both land-based and marine ecosystems and their natural processes.

Alan Mark FRSNZ, KNZM, Emeritus Professor, Botany Department, University of Otago.

Most people agree that our environment is our most precious resource and its sustainable management is essential to our welfare and that of future generations. Yet, as an ecologist, it is painfully clear that we are continuing to abuse it, on our land, in our atmosphere and in both freshwater and marine ecosystems.

This is despite dire warnings from reputable and knowledgeable scientists here and abroad. Why does the Government no longer require the five-yearly state of the environment reports from its ministry? Why have we abandoned the Kyoto agreement, essentially gutted our Emissions Trading Scheme, and exempted the agricultural sector indefinitely for responsibility for their major greenhouse gas (GHG) emissions? Our GHGs continue to escalate (atmospheric CO2 has now reached 395ppm; 350ppm is considered the ''safe limit''), pollution of fresh waters worsens and ocean acidification increases to alarming levels.

Alan Mark
Alan Mark
The experts' fear of a 1m rise in sea level by 2100, given present trends, should be shared by everyone. Yet we continue to promote economic development almost regardless of its environmental impacts, even open-cast coal mining on prime conservation land despite the threat to our unique native biodiversity there. Widespread exotic afforestation is not the answer for carbon sequestration given it is only temporary and its extra price of reduced water yield and wilding spread.

The auditor general's recent report on ''Our future needs'' expressed concern for the parlous state of our biodiversity, despite its importance for food security, medicines, fresh air, water and a clean and healthy environment, as well as a wide range of important ''ecosystem services'' that we depend on for our welfare. As the auditor general also said, we are not winning the battle against the many threats to our native species, yet we continue to down-size the funding and staff of the Department of Conservation whose responsibility they are.

Our attraction to overseas visitors as well as our so-called ''clean-green'' and ''100% pure'' image are both critical to our future welfare, yet both are being seriously tarnished by major deficiencies in the management of our environment.

We are behaving almost as if there were no tomorrow, yet we surely owe it to future generations of Kiwis to respect their needs and welfare. We ''saved Manapouri'' in the 1970s by insisting on integrating conservation with its hydro-electric development and we achieved a nuclear-free New Zealand in the 1980s, both by public pressure on the political process. Again we must demand from our politicians, a more enlightened oversight of the sustainable management of our New Zealand environment as we face the symptoms of many critical risks.

 

5. GENUINE WELLBEING:
The risk of persisting with a subsidised, debt-based economy, preoccupied with maximising consumption and GDP.

Niki Harré, School of Psychology, University of Auckland.

When we put economic indicators at the forefront of our national planning, we risk losing sight of what actually matters to people. Here is why. GDP, as most readers will know, concerns the flow of money and not how it is used. Through a GDP lens a dollar spent on a new school is the same as a dollar spent on a new prison.

The problem with this is not just that it muddles positive and negative social indicators, but that no one really cares about money. Ask anyone what they consider to be of value in and of itself, and ''money'' is very unlikely to be the response. Money we all know, is a symbol. It is useful because of what we imagine it can do, not because it has intrinsic merit as part of a thriving world. Just so we are clear, there is an awful lot that almost everyone agrees does have intrinsic merit: healthy children, native forests, white-sand beaches, rain, sunshine, laughter, compassion, human innovation, music, the list goes on.

Niki Harré
Niki Harré
So why do we spend so much time talking about money when we know money is not what matters? The obvious answer is that money is essential to acquiring basic goods and services. Fair enough. When we are talking about money as a proxy for good food, decent housing, health, education and meaningful work, then we are talking about that which matters, albeit indirectly. But when we are talking about money as a proxy for house prices, retail sales and the income gap between New Zealand and Australia, we have started to slip away from what is really important, and into the worn-out myth that by focusing on the economy, we will inevitably produce the good society.

Like any powerful myth, the economy myth is not entirely false. It is more that it is partial, and it is time for a change. As a whole, New Zealand is well beyond the levels of material wellbeing needed for human flourishing. In this era of material abundance, the media's insistence on reporting the financial news throughout the day and many of our politicians' assumptions that a healthy economy is the natural aim of collective life, creates divisions. It positions us all as competitors for a bigger slice of the money pie and celebrates extreme wealth as a sign of success. As a consequence we get caught up in a feeding frenzy, scared we'll miss out, when actually what really matters is elsewhere.

 

5. GENUINE WELLBEING:
The risk of persisting with a subsidised, debt-based economy, preoccupied with maximising consumption and GDP.

Dr Neville Bennett, economics editor, National Business Review and director, Foundation of the Blind.

I believe we should widen our measure of gross domestic product (GDP) to a greater emphasis on measuring wellbeing. GDP is a crude measure: it increases if we gad about consuming petrol in traffic jams. Similarly, until the global financial crisis (GFC) we thought we had growth, while really we had mounting public and private debt. Few economies have real balance sheets which record debts and liabilities stacked against assets.

Despite the looming crisis of climate change, we accept market prices which exclude the costs of dis-economies such as water and air pollution in production. Measures which reflect environmental costs are needed. Moreover, some distinction is needed between assessments of current wellbeing and sustainability. GDP is often treated as a measure of economic wellbeing, but can be misleading on how well-off people are. Measures of household income and consumption are more reliable, especially as real household per capita tends to expand slower than per capita GDP.

Neville Bennett
Neville Bennett
Nobel prize-winning economist Joseph Stiglitz argues that the quality of life depends on people's health and education, their everyday activities (including the right to a decent job), their participation in politics, their connection with the environment and their insecurities. This requires much government work to improve indicators, even though there will be more reporting of different kinds of inequality. The Stiglitz Commission worries about measuring sustainability, especially the question: ''can the present level of wellbeing be maintained into future generations?''.

Economic research has long stressed the importance of education in providing the skills that underpin production. Research now finds that education is also strongly associated with quality of life. Moreover, well-educated people enjoy better health; have lower unemployment, more social connections and greater engagement in civic and political life.

Harvard public policy and economics professor Kenneth Rogoff is having similar doubts. He asks ''Does it really make sense to take growth as the main social objective in perpetuity, as economics textbooks implicitly assume?''. There has been a modern tendency to argue for a broader measure of development, such as welfare, literacy and life expectancy. Prof Rogoff suggests ''There is a certain absurdity to the obsession with maximizing long-term average income growth in perpetuity, to the neglect of other risks and considerations''.

I think the essence of our problem is that this is the first time in modern history that it appears almost inevitable that future generations will be worse off. This is a major challenge to reverse the decline in most measures of sustainability and wellbeing.


The Launch

Symptoms too serious to ignore: a call to politicians and the general public to face up to Aotearoa's risky future.
• Friday March 8 programme launch, Otago Museum Reserve (Hutton Theatre if wet), 1pm-3pm, includes an outline of the project, a response from political party representatives and music by Gillian Whitehead.
• Then an evening public meeting on how best to progress the appeal, including speakers and open discussion, University of Otago Castle One Lecture Theatre, 7pm-9.30pm.


Add a Comment

 

september_carousel_header.jpg

september_carousel_footer.jpg