The government says it wants to balance green growth with digging holes, but can we do both? Perhaps we should slow down, rather than end up somewhere we don't want to be

Let's call a spade a spade. Or, at least, be frank about what the government hopes to do with its spade: It wants more mining and drilling in this country – more than most New Zealanders are comfortable with. And it wants to convince you and me that's a great idea. All this talk of "discourse" and "conversation" is all strategy.

The government's carefully managed Greening New Zealand's Growth strategy was released at the weekend – and I say carefully managed because the advisory group was chaired by Business NZ CEO Phil O'Reilly, who is both very able and can be relied upon to deliver the result National wants.

As well as stressing that few countries are better placed than New Zealand to profit from the growing demand for green products and services, the report nudges forward the idea of further oil and mining exploration, just as the government wants.

This is a classic example of a report's PR strategy being as prominent as its economic one – and National, Business NZ and Straterra are all singing the same hmyn. In only slightly different words, all are calling for 'a mature discussion' about how we deal with the mineral riches with which this country is so blessed.

But we all know that if politicians want to do something and have the focus groups behind them, they just do. You only 'discuss' when you're up against it, or at least nervous. Then you add a few key phrases, such as "we need to depoliticise the idea" or "We don't want to turn this into a party political broadcast of either the right or the left". (Quotes taken directly from O'Reilly's address at the weekend).

Cutting through the spin, what they're really saying is: 'Mining and drilling are unpopular, but we want to take the heat out of the issue and do as much as we can get away with'.

In this "conversation", the government and pro-exploring business leaders expect to do all the talking – there's no chance of them being convinced that more mining and drilling are a bad idea. It's all about persuading you and me.

Which is sad, because a mature discussion is exactly what's needed. There are compelling arguments on both sides of this debate worth hearing - serious exports and jobs to be had, but also serious risks to our environment, long-term prosperity, even our diplomacy and place in the world.

There is an Ali Baba's cave of mineral wealth in New Zealand – not just on land either, but under our vast exclusive economic zone. But just like Ali Baba's cave, if we're greedy things could end very badly indeed.

What the government has to explain – rather than trying to spin us – is how we can go into that cave without the door closing behind us.

Exactly what protection measures can be taken? What laws passed? What technology harnessed? What bottomlines drawn? What guarantees offered?

It needs to spell out how we can promote the 100% Pure image of New Zealand and protect the green tourism, cleantech and safe food industries while also drilling and mining the natural resources the other industries rely on.

That may be too hard, but I'm not yet convinced it's impossible. Norway, for example, seems to have walked a line of mineral wealth and environmental protection. They have both this and this. And do we really want to walk away from Norway-level wealth, soci al services and the like without looking at all the options.

On the other hand, there's an element of a zero-sum game here. At some point (and I'm not sure anyone knows or can know where that is), mining can only expand at the expense of green growth, and vice versa. You may be able to have a little of both, but not a lot. At some point you're too far into the cave to get out.

Which suggests caution. The temptation is strong to charge in – to start digging and drilling and making money today. But unlike Ali Baba's brother Cassim, who got over-excited and over-reached, we should think ahead and consider long-term profits.

The same argument can be made for cleantech, by the way. Let's consider our economic future carefully, not indulge in short-termism.

National's attitude towards climate change and green ecomonics is that there's no rush. We musn't lead the world, lest that costs us in the near-term, has been this government's mantra. National has repeatedly warned that the technology to cut emissions does not exist. The advisory group's report talks about markets more focused on sustainability "30 to 50 years out and beyond", not of the demand today.

Whatever the wisdom of that, the argument goes both ways. There is also no rush to mine our resources to the max today. If the technology isn't there, then let's wait until it is (as we're supposed to with methane emissions from animals). If the laws aren't passed to cover our arses in the event of a BP-in-the-Gulf-type spill, then let's wait until they are (cos we all know they weren't with the Rena). And if the business case isn't certain, let's taihoa.

The thing is, scarcity creates value. So as oil peaks and minerals are mined elsewhere, the value of our mineral wealth will only grow for later generations. There's nothing to be lost by waiting.

The green growth report makes it clear – we're well placed as it is and the demand will only grow as time passes. But are our politicians able to see beyond the three year cycle and wait if wisdom dictates patience?

Comments (13)

by David Savage on March 05, 2012
David Savage

Thanks Tim for the article.

This is a real balancing act I agree, especially at a time when the UN (in Jan 2012) called for world leaders to act fast in moving towards sustainability...

'In order to tackle the world’s pressing problems, the panel call on governments to phase out fossil fuel subsidies and invest heavily in greener forms of development. Governments should also work together on an “evergreen revolution” to double agricultural productivity while reducing resource use and the loss of biodiversity.'

This challenge to think globally and not locally in decision making seems to be getting bigger. Tim, do you have a sense of how real National govt. are taking climate change?

by william blake on March 05, 2012
william blake

A bit left field but...Thatchers Britain of the 1980's took the pit heads as the battlefield against Unionism, she knew that the mineral wealth could be locked up for future generations. In some ways it seems odd that our 'tories' are promoting ideas of exploiting fossil fuels against the backdrop of increased workers militancy, P.O.A., Affco, etc. and the Bible black fail of Pike River. The NP seem to be begging for a re- assertion of workers rights, by having 'conversation' about this dangerous and dirty work. Perhaps Key is letting the genie out of the bottle.


by Viv Kerr on March 05, 2012
Viv Kerr

There is nothing Green about growing carbon emissions no matter how you spin it. Norway has not "walked a line of mineral wealth and environmental protection" unless you chose to ignore the contribution that country's oil production has made to climate change.

by Tim Watkin on March 05, 2012
Tim Watkin

David, I'm only reading the runes like everyone else, but I think it's mixed. I think Nick Smith is serious about it, but my guess is he comes up against some hard-headed folk in Cabinet, even with some backing from the likes of Tim Groser. I just think the focus is wealth in the narrow and here & now sense... and – with some justification – a feeling that the real climate change game is being played out between Beijing, Washington and Delhi etc and while we're good negotiators, what we do is pretty insignificant – and damned if we're going to pay the price for other's sins.

Viv, that's a little harsh given that Norway's industry took off before anyone had an idea of climate change. And you've surely got to be realistic enough to acknowledge that a) their mineral wealth has afforded them life-saving and nation-building opportunities and b) whatever transition has to be made in the years ahead away from fossil fuels, it's going to take some time, or else people will suffer.

Correct me if I'm wrong, but the tone of your first sentence suggests that we must either demand the end of fossil fuels tomorrow or we're just spinning, whereas it seems to me that countries will still need to be buying and selling those fossil fuels for a while yet, even as we invest in more green fuels and move away from them.

by Philip Grimmett on March 06, 2012
Philip Grimmett
If you are unable to budget your home finances do you sell the house? No. You learn to budget. Our politicians, with our encouragement, have started to sell the house. They, and we, have to live within our collective means, fairly and justly. This is also a transfer of wealth from us all to the already wealthy to charge us for a profit margin again! This is great for the wealthy and an abdication of government to govern for the good of us all. When will we wake up because it will not end well. I told you so in advance.
by Viv Kerr on March 06, 2012
Viv Kerr

I'm not expecting an end to fossil fuel use overnight, there will have to be a time of transistion, but that means starting to decrease use not increase oil drilling and coal mining while at the same time claiming to be green or 100% pure.

by Bruce Ellis on March 06, 2012
Bruce Ellis

In this "conversation", the government and pro-exploring business leaders expect to do all the talking - there's no chance of them being convinced that more mining and drilling are a bad idea. It's all about persuading you and me.

This is obviously part of the spin strategy. I recall John key making a comment shortly after the election concerning the opposition to asset sales that when the public got to see all the facts and in the cold light of day (My interpretation not his exact words) that they would come around to the government's view that this was a good move.

If anything it seems that public opinion has hardened agaist that decision and is likely to be the same with the mining issue.

The New Zealand public might be slow to stir, but one thing is for sure we don't like to be taken for fools or for granted.

by Gareth Ward on March 06, 2012
Gareth Ward

I agree that a mature balancing of the options is in order.  But (while trying to rein in my pessimism) I can hardly see the current Government choosing to enact the level of state control in oil extraction that has seen so much of Norway's oil wealth accrue to its citizens.  It is at odds with both their ideological history and recent track record when it comes to state involvement in economic rent extraction.

by Tim Watkin on March 07, 2012
Tim Watkin

That's a good point, Gareth. What does Norway demand in royalties and what do we get by comprison? From what you say, they do more to ensure the profits stay in the country. How do the do that?

by Ben on March 07, 2012

I think Norway created a National Oil Co and invested returns in a sovereign wealth fund - but only after they knew they were sitting on confirmed oil reserves. NZ does not have the same level of certainty (and potential mineral wealth may not be comparable to off-shore oil drilling...?).

A lot of capital needs to be attracted and probably wasted (through looking for the stuff), before this supposed mineral wealth will have an impact on our living standards.

by Mamari on March 07, 2012

"National has repeatedly warned that the lack of technology to cut emissions does not exist." Just checking...This is supposed to read "National has repeatedly warned that the technology to cut emissions does not exist", right?  

by Tim Watkin on March 07, 2012
Tim Watkin

Thanks Mamari, you're right. Changed made.

by Tim Watkin on March 07, 2012
Tim Watkin

Thanks Ben, you reminded me. Norway has two oil funds from the profits of the oil industry and exploration licences – one invested all over the world and one just in the Norway stock exchange.

I just did the quick check and the global fund is, as of last year, the biggest pension fund in the world. And the govt is allowed, under its own rules, to spend up to 4% of it in the budget each year. Now pushing that sort of oil into world markets may make them unpopular with some and a large de facto GHG emitter, but having the world's largest pension fund would pay for a lot of hip ops and, well, pensions... not to mention bolstering the local capital markets, eduating kids, creating jobs and businesses, cleaning up rivers and on and on...

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