Time to harness our green growth opportunities

ROB MORRISON
Last updated 15:16 06/08/2011

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Despite the 16 United Nations Climate Change Conferences held since 1995, the annual rate of CO2 emissions into the atmosphere has actually accelerated from about 1 per cent per annum in the 1990s to 3 per cent per annum since 2000.

OPINION: For many countries, especially developing ones, the issues of energy security, population growth, environmental degradation and resource scarcity need to be addressed more urgently than global warming and climate change.

The efforts to meet these challenges have, more recently, been grouped under the title of "green growth".

The commercial opportunities associated with green growth are enormous.

"Markets for low-carbon energy products are likely to be worth at least $500 billion per year by 2050," the British Government's Stern Review said.

A report commissioned by the British Government in 2009 put that number as high as US$6 trillion (NZ$7t) by 2015.

In New Zealand, a group of businesspeople with a strong commitment to, and concern for, our country's future have joined to fund a campaign to help ensure New Zealand aligns itself with the opportunities created by the shift to green growth.

The strategy of Pure Advantage is simple.

New Zealand urgently needs to improve its own environmental stewardship to protect its clean and green image.

In doing so, by using new and existing technologies and skills developed to improve the sustainability of our production processes, our energy efficiency and resource usage, we give ourselves the ability to maximise the returns from the opportunities created by global green growth.

The linkage is important because we have to succeed here in New Zealand to be successful internationally. If we aren't successful internationally we won't generate the wealth we need to make the required investments in education, healthcare, the environment and infrastructure.

New Zealand's biggest opportunities are likely to be in Asia and not with our traditional trading partners, Australia, the United States and Britain.

More than two-thirds of the global green stimulus after the global financial crisis was committed in Asia. Countries like Japan, Korea, Taiwan and Singapore see huge upside opportunities from green growth. To reduce reliance on fossil fuels and imported resources, these countries are investing heavily in alternative energy and energy efficiency to meet their own challenges and to take advantage of the opportunities available globally from green growth.

Under the "National Strategy for Green Growth" plan, Korea intends to invest about US$85b (NZ$99b) during a five-year period on the more efficient use of resources. China has also committed to significant investment. When it comes to China's environmental impact, for every positive there is a negative.

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Under the 11th five-year plan, China met its target of reducing its energy intensity per unit of GDP by 20 per cent, but with the economy growing at 9 per cent per annum during this period, total energy consumption increased by 39 per cent.

China's carbon emission per unit of GDP decreased by more than 50 per cent from 1990 to 2008 but total CO2 emissions multiplied by 2.8.

Despite huge investment in hydro, wind and solar, coal usage in China's energy mix went up from 68 per cent to 70 per cent between 2005 and 2010.

In China itself, the key theme of the 12th five-year plan is rebalancing the economy and protection of the environment. China plans to invest more than RMB3t (NZ$550b) in the next five years in the environmental protection industry.

For New Zealand, with a clean green competitive advantage and a free trade agreement with China, the potential opportunities are enormous.

However, there is very little co- ordinated thinking and planning in New Zealand about green growth opportunities. Our clean and green brand is a competitive advantage, but we need to be more honest in our appraisal of the gap between rhetoric and reality.

The best examples of countries benefiting from green growth are those where the public and private sectors have identified the opportunities and invested in the capabilities to maximise returns. Investment in education, research and the workforce is crucial, as is long-term government planning.

In Britain, Denmark, California and Singapore, government regulation for energy efficiency and low carbon targets have resulted in significant innovations and investment by the private sector, leading to material job creation and export growth in the green growth sector.

There is no country in the world that promotes its clean and green image as much as New Zealand does and there is probably no country in the world that is as reliant on its clean and green image for exports and tourism. So in the green growth race - and it is a race - New Zealand should be out the front, but it is not. It is Pure Advantage's belief that for the benefit of all New Zealanders this has to change.

Rob Morrison is chairman of Pure Advantage. Pure Advantage is an organisation of business leaders that promotes clean, green industry for economic growth.

- The Dominion Post

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