Pity the 12 percent of New Zealand business people who still think climate change is problem for later. Their competitors – 77 percent of New Zealand business decision makers who regard climate change as problem to be managed now or urgently – won’t mind.
The “do-little, as late as possible” people are running what Ernst & Young has called one of the top 10 strategic risks facing business today. It calls the risk “radical greening” – variety of pressures driven by consumer and regulatory demands and only risk to those who appreciate it too late.
As policy makers in our main markets, the US, Japan, Europe and soon China, catch up with public sentiment on the need to lower emissions, trying to avoid global temperature rise of one to two degrees and its massive economic, social and environmental costs, the opportunities of the emerging international ‘green’ or low-carbon economy are massive.
The new low-carbon economy is for Kiwis who know the benefit of adopting world best practice, who support innovation, like creating new markets, cutting costs (to hold onto current sales and stealing more market share) – and taking on the world. They stand to profit from significant new opportunities.
In the past few weeks we have seen the leaders of Federated Farmers and Greenpeace sign up to supporting emissions trading in principle, in the national interest, even though the decision was incredibly hard on some policy points. They were joined by all but two of the 34 member Climate Change Leadership Forum, cross sector group of business people, business organisations, NGOs, unions and senior officials set up to advise the Ministers of Finance and Climate Change Issues on emissions trading policy.
Smart farmers are looking at how to wipe out all of their emissions liabilities and making more money at the same time. Using new New Zealand-invented nitrogen inhibitors will not only boost plant growth and production, but lower nitrous oxide emissions by third. Alone, their use on every dairy farm would let the sector, our biggest emitter, return to its 1990 level of nitrous oxide emissions – while also making more money.
Recent MAF research estimated meat and wool profits would jump another 33 percent on 2006 price levels if farmers also planted forest sinks on some of their land. And this doesn’t take into account other energy efficiency measures.
One very large North Island sheep and cattle farm can sequester all of its annual emissions of 14,702 tonnes of carbon dioxide by planting 500 hectares of forest. It will then face no emission liabilities. Against this real knowledge of what’s possible, and the work of the world’s largest team of scientists researching other ways to reduce agriculture emissions, the smart business people are aiming to profit in world that has no alternative but to go green. In Australia, 1000 farmers are queuing to join carbon-trading scheme, generating emission credits by planting vegetation on poor soil not suitable for other uses.
Even city councils are looking to turn their forests and town belts into emission-credit profit centres. Wellington City decided last month to apply to MAF for entry to the forestry emissions scheme in bid to earn hundreds of thousands year in emissions credits.
The forestry credits system will become multimillion-dollar earner for Maori land owners.
Then there are the renewable energy technologies being developed here: the resource consent granted to install the first power turbine in Cook Strait; moves to run turbines beneath the surface at Kaipara Harbour entrance.
And the new Kiwi intellectual property which could be worth billions on world markets, using algae from sewage ponds to grow emission-free bio fuel; turning emissions from steel mills into emission-free aviation fuel. Even Boeing has its eye on the sewage pond fuel as way of helping the world’s airlines avoid emissions charges and keep expanding.
Research is also underway in New Zealand on sequestering carbon in cultivated soil. Once proven, and then included in new post-Kyoto agreement as legitimate source of emissions credits, this practice opens up the possibility of helping the country eliminate its entire emissions liability.
Similarly, new jobs are being created in renewable energy.
Other changes in business practice will deliver new profit centres. One Kiwi dairy farmer is now generating enough electricity from methane from his cows’ manure to cut $30,000 year off his power bill.
Multiply that by more than 11,000 dairy farms – and stop worrying about opposing pricing emissions, through the emissions trading scheme, as the incentive to do things smarter.
• See also “Smart dollars” in Just Good Business news.
Peter Neilson is chief executive, New Zealand Business Council for Sustainable Development.
