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Pure Advantage calls for New Zealand to ‘get ahead in the green race’

Pure Advantage calls for New Zealand to ‘get ahead in the green race’
Green growth advocacy group Pure Advantage has launched a significant new report on attaining balanced green growth in a world awash with ‘green washing' and failing to act would amount to "economic treason", according to one commentator.

Green growth advocacy group Pure Advantage has launched a significant new report on attaining balanced green growth in a world awash with ‘green washing' and failing to act would amount to "economic treason", according to one commentator.

 The report, which was independently compiled by Vivid Economics of London and the University of Auckland Business School, targets seven industry-specific green growth programmes within a global context.

 The report’s seven key advantages identified are:

  • Retrofitting an efficient building environment
  • Creating a significant geothermal export industry
  • Sustainable agricultural technologies
  • Installing bio-energy and waste-to-energy infrastructure
  • Installing the building blocks of a smart grid
  • Establishing a woody mass biofuel and bio-products industry
  • Establishing a world-class biodiversity driven ecotourism and conservation education programme

Pure Advantage chairman Rob Morrison said all of these targets were “significant, deliverable and can leverage existing investment, skills and knowledge.”

Green Growth: Opportunities for New Zealand  has been touted as “the first robust analytical assessment of New Zealand’s green growth economic opportunities".

 “We firmly believe on the basis of this significant macroeconomic report that New Zealand has the potential to generate billions of dollars in new high-value economic growth, whilst at the same time improving New Zealand’s environmental performance,” said Morrison.

The report noted the best export opportunities for New Zealand include sustainable efficient agricultural products and services, geothermal energy, biotechnology and forestry, including second-generation bio fuels. These would further develop upon New Zealand’s natural competitive advantages.

 However, the sheer size of the green economy was considered and found that global investments in low carbon energy alone could reach more than US$3 trillion per year by 2050, according to the International Energy Agency.

Greens co-leader Russel Norman said geothermal was one of New Zealand's key advantages and resonated strongly with the party.

Unfortunately, the government "has headed in the opposite direction after the last election".

"We did some good work with them with our joint projects like the home insulation programme and the cycleway but since the rise of Steven Joyce it is really picking winners in the fossil fuel area."

 Pure Advantage, whose trustees include Rob Fyfe and Sir Stephen Tindall, said the current government had made some, but not nearly enough progress on harnessing green growth opportunities.

 In 2006 the Yale Environmental Index ranked New Zealand number one in the world but this year we fell to 14th place.

 The Pure Advantage plan aims to reverse trends such as these where New Zealand could fall behind and squander its inbuilt advantages in sustainable production.

 Waikato University’s professor of agribusiness Jacqueline Rowarth said New Zealand’s rate of R&D in green growth strategies, whether by the public or private sector, must match our green banding.

 "The main recommendations in the Green Growth report are spot on – increasing research and development to the OECD average and high level support for New Zealand's brand – anything less is economic treason.”

Knowledge, not nature

Professor Shaun Hendy of Industrial Research Ltd said while the report was understandably focused on the greening of our existing primary sector industries, more attention could have been paid to opportunities to grow our economy via greener, knowledge intensive sectors. 

"Although biotechnologies are identified as an area for potential green growth, there are opportunities for New Zealand to grow sustainably via a diverse range of knowledge-intensive industries. 
 
"Fast growing firms like the software company Xero, the medical device company Fisher and Paykel Healthcare, and others highlighted in the recent TIN100 report, are much, much greener than the primary sector and offer real opportunities for long term growth.  These companies measure the value of their products not by weight, but by the knowledge that goes into their manufacture.  So while I applaud the maintenance of our clean green brand, as highlighted in this report, I do worry that this is often seen as our sole source of comparative advantage. 
 
"In reality, we are a creative, well-educated and talented people, with an ability to succeed in high technology industries. We should base green growth on knowledge not nature."

Dr Eric Crampton, senior lecturer in economics at the University of Canterbury, commented that there was much to like in the report but he worried some of the opportunities may impose cost well in excess of potential benefit.

 
"While more energy-efficient buildings would be very nice to have, regulatory mandates in the area often have perverse effects. For example, mandates that homes undergoing renovations also be brought up to higher energy efficiency standards can encourage people to avoid renovating their homes. Financing programmes assisting those already undertaking renovations for earthquake-strengthening to improve energy efficiency at the same time would be more effective; by contrast, EQC in Canterbury has been barring homeowners from undertaking any energy-efficiency improvements while repairing earthquake damage.
 
"Imposing carbon dioxide emission standards on New Zealand vehicles, when we do not make vehicles, mostly shifts to other countries those used cars we would have bought. We already have seen evidence of reduced used car availability and higher prices consequent to the government's recent regulatory measures that effectively barred Japanese imports produced prior to 2005. Further, shifting towards greater use of electric cars because of New Zealand's low electricity emissions-intensity would only work if we were able substantially to expand our base of hydroelectric or geothermal generation.
 
"I was somewhat surprised to see no recommendations around allowing well-regulated hydraulic fracturing technology for natural gas extraction. Wave and tidal power are worth investigating, but remain rather too uncertain to bank on. Greater use of natural gas powered thermal electricity generation is likely New Zealand's best bet for lower emissions intensity power generation in the absence of substantial breakthroughs in other energy sources."