Green R&D failure is economic treason

RICHARD MEADOWS
Last updated 14:49 15/11/2012

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Failing to boost New Zealand's research and development spending to capitalise on "green growth" would be economic treason, experts say.

Politicians and academics have applauded a report released today by Pure Advantage, a group of local business leaders championing the green growth cause.

Green Growth: Opportunities for New Zealand found the country stood out for its poor investment in R&D, with Government spending below the OECD average.

Pure Advantage chairman Rob Morrison, who also chairs Kiwibank, said the country would slip down the OECD ladder unless it could add value to exports.

University of Waikato AgriBusiness Professor Jacqueline Rowarth said the main recommendations to boost R&D and support the clean, green New Zealand branding were spot-on.

"Anything less is economic treason," she said.

Rowarth said farmers knew that already as the biggest investors in R&D, but more Government leadership was required to support the brand.

Green Party co-leader Russel Norman said the Government should be supporting the "smart, win-win" economic plan.

"Since taking office, the National Government has unfortunately chosen to further exploit the environment for the sake of the economy leaving both the poorer."

He pointed to the Yale Environmental Index cited in the report, where New Zealand has slipped from being the greenest country in the world in 2006 to now languish in 14th place.

Economic Development Minister Steven Joyce welcomed the report's focus on R&D, energy efficiency and water reform, and defended the Government's track record.

He said it had invested heavily in research projects in most of the key areas identified in the report, and had plans to grow R&D spend by private companies.

Joyce said the recommendations to further develop fisheries, aquaculture and the timber industry also meshed well with Government initiatives that were already underway.

Industrial Research industry and outreach fellow Professor Shaun Hendy said it was understandable that the report focussed heavily on primary industries, but more attention could have been paid to the knowledge sector.

He said tech firms like software sharemarket darling Xero and medical device company Fisher and Paykel Healthcare were "much, much greener" than the primary sector and offered opportunities for long-term growth.

"While I applaud the maintenance of our clean green brand ... I do worry that this is often seen as our sole source of comparative advantage," he said. "We should base green growth on knowledge not nature."

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Another commentator was surprised that there were no recommendations around allowing well-regulated hydraulic "fracking" to extract natural gas.

"Wave and tidal power are worth investigating, but remain rather too uncertain to bank on," said Eric Crampton, senior lecturer in economics at the University of Canterbury.

He said greater use of natural gas-powered thermal electricity generation was probably the best bet for lower emissions power generation, unless there were major breakthroughs with other energy sources.

The Green Growth report was prepared by London-based economics consultancy Vivid Economics and Auckland University Business School, and can be viewed in full here.

- BusinessDay.co.nz

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