Business owners around the country are still counting the cost of Cyclone Gabrielle. Its severity and the increased frequency of such events are symptoms of climate change.
For decades we’ve been warned of the oncoming storms. Now they have come crashing into our lives. But the political response has been to cut climate change initiatives. This is stacking up uncertainty and long-term risks in the way of progress. As journalist Bernard Hickey put it: “Isn’t this the rainy day we’ve been saving for?”
Apparently not.
So far, the government has binned the Sustainable Biofuels Obligation. It’s abandoned the Clean Car Upgrade, and the Social Leasing Scheme. These were all aimed at helping to get storm-forcing emissions down. It has also shifted transport policy away from focusing on cutting emissions.
Fuel subsidies are continuing to effectively fund climate change with taxpayers’ money, while offshore owned oil companies enjoy record profits.
And nobody felt it was worth paying the low, going rate for carbon credits in the latest New Zealand Emissions Trading Scheme auction. This points to plummeting confidence in the scheme, which took years to get rolling after it was hobbled by previous governments.
Basically, everyone’s waiting to see if the government is now serious enough about climate change for the credits to be worth anything. That leaves a $1 billion dollar hole in the government’s budget that the auction was supposed to raise. And more losses could follow if government policy suggests the credits aren’t worth the pixels they’re written on.
At the same time, we have Auckland Council’s first budget under Mayor Wayne Brown. This acknowledges that climate change damage is going to be costly in years to come. So we need to take money from the Climate Action Targeted Rate to shore up Auckland Transport. AT should then do less to support low carbon transport options like buses, cycling and walking in favour of drivers. That’s like taking up smoking in the run up to doing a marathon after you’ve just had a heart attack.
As a nation we’ve ditched ideas that amount to just over a quarter of the emissions cuts we’re supposed to be making in the next two years. It’s unclear how we’re intending to make up the difference. Are we just going to send more of our money overseas to cover it with other people’s credits? Or crash out and miss our targets completely?
The renowned Climate Action Tracker analysts already rate our climate response “Highly Insufficient”. Do we really want to become an also ran in the race for workable 21st century economies?
More uncertainty
One of the major impacts of the cyclone has been business uncertainty. This startling loss of nerve is making that worse. And we’re heading into an election where the major opposition party doesn’t even list climate change as a priority.
So, what’s all this got to do with your business? Well, the ETS auction reflects the kind of investment decisions businesses of all sizes are having to make. Climate change and our response have an ever increasing effect on the business playing field. What we need most is consistency and fairness right across the system.
Battered business plans
Let’s take one example. Jacqueline Farman and her husband Al own the Hammer Hardware store in Whitianga. The store wasn’t directly damaged by the storms. But their business plan has been shaken to its foundations.
“Tourism has fallen through the floor,” she explains. “So many people have just left the Coromandel and not come back. Before Christmas it was heaving. We were having the best summer we had had for about three years. There was so much pent-up demand after Covid.”
Then came the poor weather in January, cancelling events all over the region. Then the cyclone. The couple are Auckland-based. The disruptions have effectively moved their workplace another hour or so down the road.
Jacqueline also runs the Purpose Business and chairs the board for the Sustainable Business Network. She understands the issues that have helped set these calamities in motion. But that isn’t providing great comfort at this point.
“This isn’t a one-off event, and there doesn’t seem to be a plan,” she says. “This is going to get more common. It raised big questions for us. We had been growing really well. We had been considering expanding into a Mitre10. But we’re looking very carefully again at what that means for us now. It makes you very cautious about investing to grow.
“Last year we invested a lot, but we’re not going to do that this year, and we’ll pull back on our ordering. It all feels like really hard work at the moment.”
Jacqueline is confident that their shop will weather the storm, for now. But she’s concerned how this kind of uncertainty will impact the overall economy and community.
“There’s no insurance for a general slow-down,” she points out.
Stay on course
That is what we’re going to increasingly experience if we don’t step up and face reality. We have to make brave decisions, stay the course and get to grips with climate change sharpish.
We have a national plan. We have targets. We have the Climate Commission. What we need to do now is stick to the plan. We can’t allow ourselves to be blown off course by the very events the plan is supposed to address.
That means not just trying to ‘mitigate’ by patching up our infrastructure. Yes, we have to do that work, but we can’t mitigate away from the climate.
We need to swing our investments towards a stable low carbon circular economy, where waste and pollution become largely things of the past.
Otherwise we’ll end up desperately trying to fix the roof over and over again, when the sun isn’t shining any more.
First published in NZ Business