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Dear
Friend,
I'm really
sorry to email you so late on a Friday, but this can't wait. And, ,
it's not good.
I am sending this
most urgent email to you and every one of the Taxpayers' Union's most
loyal supporters because a decision announced late last night by the
Climate Change Minister is nothing short of economic
sabotage. In terms of our kids
and grandkids enjoying first-world living standards, it's quite
literally worse than any decision taken by Jacinda Ardern or James
Shaw.
It took
everyone by surprise. I only got wind of this when I saw the
Taxpayers' Union media release (I've copied it to the end of this
email) at lunchtime today. My heart sank.
I
appreciate that reasonable minds can differ on the urgency of climate
change – but I think you'll agree that sacrificing New Zealand's
economy for no material effect in emissions is the ultimate own
goal.
In short the Government has
just locked in the Ardern/Shaw anti-farming legacy, and signed New
Zealand up for a brand new (2035) commitment that will see thousands
of dollars for every man, woman, and child sent overseas for climate
credits.
First some
background.
You will
recall that back in 2021, former Climate Change Minister James Shaw
and then Prime Minister Jacinda Ardern flew to Glasgow and signed New
Zealand up to a climate change/emissions target of a net reduction in
emissions of 50 percent (compared to 2005) by 2030.
At the
time, no meaningful economic analysis, public consultation, or debate
occurred. In fact, the Ministry of Business Innovation and Employment
voiced their concerns saying “we are concerned
that insufficient analysis has been undertaken to understand the
fiscal and social impacts” of a 45 percent
reduction target, let alone the 50 percent that Ardern and
Shaw secretly agreed...
The
politicians just took this decision because, in their gut, they just
felt it was the right thing to do.
And what
caused particular angst, was that the targets NZ signed up to
include agricultural emissions (i.e. methane, or cow farts).
Short of culling cows (and tanking New Zealand's largest export
industry), those emissions are impossible to avoid.
No other
developed country faces the same problem. Because of our small
population and disproportionate reliance on agriculture, New Zealand's
emissions makeup is more akin to a developing country, which, under
the UN Paris Agreement, doesn't have to cut emissions in the same way
as we have signed up to.
Even if we
could cut agricultural emissions, it would be pointless in terms of
improving global warming: New Zealand's agricultural sector is the
most emissions-efficient in the world. Any calories/meat/milk-powder
New Zealand doesn't produce will be done elsewhere, and likely result
in an overall increase in emissions.
These were
the points made by the 'groundswell' farming protests, Federated
Farmers, and even the National Party when they were in
opposition!
To put the 50 percent net
reduction target into perspective, half of New Zealand's emissions
relate to agriculture!
So that
leaves non-agricultural emissions.
Thanks to
Covid, in 2020 New Zealand shut down most of the economy to lockdown
for months. Despite
the Covid shutdown, official data† shows that emissions
declined by only three percent that year!
So the
idea New Zealand can or will get to a 50 percent reduction by 2030 is
absolutely fanciful. To hit the 2030 target emissions would have to
fall by five percent per year!
How much is the 2030 target going to cost
households?
There are
lots of variables that go into forecasting where New Zealand's
emissions are going to be in five year's time (e.g. the strength of
the economy, how many trees are planted, whether we get wet winters
and hydro lakes get rain etc).
But what
Ardern/Shaw signed us up for means that missing the target (and there
is absolutely no doubt we will miss it) determines how much New
Zealand is going to have to cough up and pay for international
emission units.
Last year Treasury worked out what New Zealand is on the
hook for. Are you sitting down, Friend?
Up to $24
billion is the latest official estimate for the 2030 deadline.
To put
that into perspective, $24 billion is more than the current cost of NZ
Super. $12,000 per household!
And
that's not even counting the cost of lost economic growth, higher
energy costs, and lost exports.
Friend, I
know these numbers are unbelievable, and it's been something the
Taxpayers' Union has been struggling to put into perspective and to
communicate how on Earth to raise the alarm about the seriousness of
what New Zealand faces. It's a dozen Dunedin Hospitals. Or 34 times larger than the
total new spending allowance Nicola Willis has set for this year's
Government budget.
Because
the payment isn't due until 2030, it's just outside the Treasury's
"forecast horizon" so doesn't yet appear on any of the Government's
fiscals.
I don't
think it's an exaggeration to say that it's Ardern and Shaw's ticking
time fiscal time bomb.
Friend, late last night, Climate Change Minister Simon Watts
announced that he is committing New Zealand to even harder
targets for 2035!
Simon
Watts is set to sign NZ up for a second eye-watering bill for
2035.
Once
signed-up, it means New Zealand will have to pay a second
time for a target that Christopher Luxon / the National Party have
previously said is totally achievable!
It's bad
enough that New Zealand is hopelessly off track when it comes to
meeting the existing 2030 target, and the $24 billion bill left by
Ardern and Shaw, but to do it all over again is nothing short of
economic sabotage.
Why haven't the media covered this?
Friend,
the media are in dire straits. Newsrooms are a fraction of the size
they used to be, and those who are left are probably so young they
either don't understand the economics or are so committed to extreme
views of 'climate change mitigation at any cost' that they just don't
care.
And, I'm
sorry to be so blunt, but the only reason Simon Watts' office would wait until 8:30pm
on a Thursday night is so that the morning radio shows are already
planned and there won't be 'breaking news' style
coverage.
It
speaks volumes that Watts waited until after Parliament rose for the
week, and with Parliament in recess next week, by the time political
journos get back to work, the news will have moved
on.
As far as
I can see, with the exception of the Taxpayers' Union, Federated
Farmers, and other watchdog and industry groups, this announcement has
been totally missed!
Friend, if there is any chance for the economy to get back on
track, we must ensure Christopher Luxon, Winston Peters, and
David Seymour, overrule Simon Watts and set a realistic
target.
Will
you join me in emailing the Coalition's Party
Leaders?
While the USA has pulled out, and other countries hedge
their bets, why is Luxon's Government doubling down?
Last week,
the US pulled out of the Paris Agreement, and with the UK’s ‘net zero’
intentions in question (their Labour Government is 'going for growth'
too!), it makes no sense for the New Zealand government to sign up
for a second round of ‘ambitious’, sorry, 'impossible' targets if they
are serious about growing the economy.
Simon
Watts has got this one wrong. Introducing more ambitious targets to
smash the economy harpoons Christopher Luxon's attempts to 'Go for
Growth'. Take
30 seconds to tell the Government that.
But something needs to be done about climate
change, right?
New
Zealand is already one of the most emissions-efficient countries in
the world. More than 80 percent of our electricity comes from
renewable sources. Our farmers are the most emissions-efficient at
what they do. We already have an emissions trading scheme that covers
more greenhouse gas emissions than any other country in the world. Of
course, we need to keep up the momentum, but it's not right to say
we're not already 'doing our bit'.
Paying
the rest of the world billions of dollars serves to make New Zealand
poor – it doesn't serve to solve global warming when the US, China,
and Russia are not part of the same
agreement/commitment.
Christopher Luxon gets this – well he did when he was
Opposition Leader anyway.
The $24
billion dollar cheque could buy 12 Dunedin Hospitals. It could build
16 Transmission Gully Motorways. It could build 40,000 new school
classrooms. It could even be used to fund more in-country climate
initiatives!
Simon
Watts just turned the $24 billion liability into a potential $48
billion liability. It's
economic sabotage on a grand scale. We need to stop
him.
In a
country cancelling infrastructure, health, and education investment
due to the fiscal crisis can we really afford to burn billions on an
unobtainable climate target?
Make no
mistake, I want Christopher Luxon and his Government to succeed and
deliver for New Zealand. I know the Taxpayers' Union are committed to
sensible climate change mitigation policy. But if last night's
decision stands, Mr Luxon (and the country) is destined to fail. We
can't let that happen.
I hope
you'll forgive me for bringing this to your attention.
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Peter
Williams
Financial Supporter and Former Board
Member
New Zealand Taxpayers’ Union
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Ps.
This is the media release the Taxpayers' Union sent out reacting to
Watts' late night announcement:
MEDIA
RELEASE
SIMON WATTS JUST HARPOONED THE PRIME MINISTER’S ‘GOING FOR
GROWTH’ PLAN
FRIDAY 31
JANUARY 2025
FOR IMMEDIATE RELEASE
At 8pm last
night – timed, presumably, to avoid pick up on the morning news shows
– Climate Change Minister Simon Watts released New Zealand’s 2035
Nationally Determined Contribution to combatting climate change under
the Paris Agreement.
The target, which locks unavoidable
agricultural emissions into New Zealand’s international targets, are
even more ‘ambitious’ than the 2030 targets made when Jacinda
Ardern/James Shaw flew to Glasgow. They will cost future taxpayers
literally tens of billions of dollars in
penalties.
Taxpayers’ Union Executive Director, Jordan Williams,
said “Ardern’s 50% emissions reduction by 2030 target was ludicrous.
Treasury estimates that in just five years taxpayers will be on the
hook for up to $24 billion - that’s $12,000 per New Zealand household.
The Government has now signed us up for another bill for five years
later.”
“To not only lock this cost in, but go even harder for
2035 is economic sabotage. Watts and his Cabinet colleagues are not
going to be around in a decade to have to pay the bill, but are
doubling down on Paris at the very time our trading partners are
pulling back.”
“Half of New Zealand’s emissions are
agricultural. To achieve the 51-55% reduction Simon Watts has put NZ
on the hook for would mean we either must shut down parts of our
agricultural sector, or just about everything else. To say this is
fantasy does Mickey Mouse a disservice.”
“The only way
New Zealand avoids paying tens of billions in international carbon
credits is if every square inch of Otago and Southland is planted in
pine. But even the Government’s own experts advise that pathway is
not credible.”
“So this decision will see New Zealanders
having to stump up billions more to buy international credits in a
decade’s time.”
“The Taxpayers’ Union has long supported
sensible emissions reductions using our world leading Emissions
Trading Scheme. But such a scheme can only operate with realistic
targets and collective international action. Sacrificing our economic
prosperity at the altar of good intentions when other countries are
pulling back is nothing short of economic
sabotage.”
“Minister Todd McClay was on radio this morning talking
about how the Government want to ‘power up’ agricultural exports. He’s
sure in for a shock.”
“Meanwhile, Simon Watts has just harpooned
the Prime Minister’s ‘Going for Growth’ plan. Mr Luxon, Mr Peters, and
Mr Seymour need to step in and overrule this
decision.”
ENDS
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