Can Pure Advantage deliver?

The auguries for Pure Advantage are not as strong as they might be.

The auguries for Pure Advantage are not as strong as they might be.

pattrick smellie idealogBy the time you read this column, the powerfully resourced green growth lobby group Pure Advantage will have published the results of a research project between the University of Auckland Business School and a London consultancy, Vivid Economics. Released for publication November 15, the report represents the start of the most ambitious phase of the Pure Advantage campaign plan. Over coming months, its organisers will seek corporate leaders to champion a brace of the most promising areas for accelerated green growth at both the political and commercial levels.

How well that works is anybody’s guess. The intent can’t be faulted, and the existence of a bold plan of action is laudable. But the auguries for Pure Advantage are not as strong as they might be. Without wanting to rain on the parade of a worthy cause, there are three big problems.

First, there’s the naivety of the Pure Advantage leadership. There are some big names amongst its primary backers, such as Air New Zealand boss Rob Fyfe and Mitt Romney’s would-be helper Chris Liddell, but chairman Rob Morrison, brother of the late Lloyd, comes across as a late convert to environmentalism, although his investment banking background gives Pure Advantage commercial credibility that environmental NGOs often lack.

Second problem: the Key administration’s wilful rejection of the Pure Advantage initiative. Apparently because it involves Labour-linked figures such as Philip Mills, of Les Mills gym franchise fame, senior ministers have gone tribal on Pure Advantage. They prefer the safer ‘smart, greenish’ growth proposed by its Green Growth Advisory Group, chaired by Business New Zealand’s Phil O’Reilly. The result is a failure of imagination that
hands Pure Advantage to the Opposition parties at a time when the Government is losing second-term momentum in a way that feels more like the decline of a third-term administration.

It seems the centre-right Government doesn’t believe it can pursue well-regulated mineral and hydrocarbon extraction at the same time as actively welcoming initiatives that would bolster our global reputation as a clean food producer and tourism destination, and a smart, innovative place.

This failure is casting every other environmental policy reform the Government is pursuing in a bad light. Shorter timelines for resource consents, the first ever regime to regulate exploitation of the Exclusive Economic Zone and moves to improve affordable housing are all positives that don’t have to sacrifice environmental bottom lines. But the Government seems almost to be wishing for that outcome. Inexplicably hostile acts such as canning the five-yearly State of the New Zealand Environment reporting – a National initiative of the 1990s – give the sense of a Government hell-bent on an agenda that pits the economy and the environment against one another.

That dichotomy didn’t exist when Nick Smith was Environment Minister and the Cabinet’s strongest voice for the environment. With Environment Minister Amy Adams at the helm, such nuance has been all but swept aside. Instead of laying claim to a credible ‘blue-green’ agenda, National looks increasingly ‘blue-blue’ on the environment, as in the navy blue reefer jackets so ubiquitous at National Party regional conferences.

This is a turn-off for urban swing voters who might’ve flirted with National at the last election, but it probably shores up the rural heartlands. National is moving backwards in its thinking on the environment. It doesn’t bode well for Pure Advantage.

Thirdly, however, there is the vexed question of what Pure Advantage can actually deliver.

For all the shortcomings of National’s approach, the reality is that without subsidies – which New Zealand governments don’t do and which European and American Governments have been regretting owing to their expense and mixed results – a lot of green growth initiatives currently fail at the commercial hurdle. Of course, subsidies might be unnecessary if the global price of carbon were high enough to make some green technologies competitive with fossil fuels, but that is largely out of the Government’s hands.

For all that it is guilty now of having the developed world’s weakest emissions trading scheme, New Zealand’s super-low carbon prices are just part of a wider global phenomenon. Carbon prices will rise eventually, but it might take another 10 years.

Until that happens, the business case for many green growth initiatives will continue to fall flat. New Zealand may be both wise and left with little choice than to be a ‘fast follower’ of global green growth trends. But there’s not much of a campaign in that.

Pattrick Smellie is a Wellington journalist and founder of the Businessdesk news service.