Top eight benefits of acting on climate change

When we talk about climate change, a lot of people (including our public servants and politicians) focus on the cost of taking action – most commonly without any regard to the cost of not taking action. So the conversation usually boils down to thinking about what is the least we could do, so we can minimise the cost in the short-term.

At the Morgan Foundation we think there are positive reasons for taking action on climate change and that it could actually be a good thing. Let’s look at the top eight.

1. Healthier country

Our current government likes to frame climate action as horrendously expensive, but in reality the cost probably pales in comparison to what we spend treating preventable health problems like diabetes and heart disease. If only there was a way that cutting emissions could also tackle these first world health problems! Oh, wait…

That’s right, car dependence is a big contributor to making us fat and sick. Cities like Seville have shown that avoiding urban sprawl and making walking, cycling and public transport more attractive will yield big dividends for health – and cut carbon at the same time. The World Health Organisation have even written a report on it.

For another example, insulating houses might have a relatively small impact on CO2 emissions in New Zealand (people tend to use most of the energy savings to heat their homes a bit more) but economic evaluations show it’s worth doing for the health benefits alone.

It’s things like this that have doctors and other health professionals turning into climate change activists. Earlier this year, The Lancet – one of the world’s most prestigious medical journals and hardly a bunch of raving greenies – ran a year-long Commission on Health and Climate Change.  Their central finding was that “tackling climate change could be the greatest global health opportunity of the 21st century.”

All of this stuff has big knock-on effects for the economy, with fewer sick days and a more productive workforce. A comprehensive Danish study even found that having kids walking or biking to school has a greater impact on their ability to concentrate than whether or not they’ve eaten breakfast. In short, a healthier population means a wealthier country. Fitter and thinner, smarter with a smaller carbon footprint.

2. Cleaner air, cleaner water

Staying on the health theme, there’s a double whammy when it comes to transport. It’s a little known fact that local air pollution from motor vehicles kills roughly as many people each year as the annual road toll. The Health and Air Pollution in New Zealand Study estimated 256 premature deaths in 2006 – but that’s probably an underestimate as it excluded the effect of nitrogen oxides (the greenhouse gases Volkswagen was found out to be cheating the tests on). Again, getting more people cycling and using public transport will help reduce these avoidable deaths and other air pollution impacts. Even more importantly, so will electrifying our cars and buses.

Water quality is a much hotter issue than air quality in New Zealand, and again there are major synergies with climate change action. If we want swimmable rivers, we know we need to stop putting more cows on our land and cut down on our use of fertilisers – the same things we should be doing to reduce nitrous oxide emissions from agriculture. This will also reduce methane emissions, although as we’ve said before it’s the long-lived greenhouse gases that we should be more focused on.

3. Energy efficiency

We waste a lot of energy in New Zealand (remember energy isn’t just electricity – it includes transport fuels, etc.). Not only is that bad for the bottom line (unless you’re an energy supplier), it also means we’re unnecessarily emitting carbon for no gain – even for electricity, the marginal generation still tends to come from gas and coal. A recent OECD report found New Zealand ranked 28th out of 34 on energy efficiency, which “demonstrates a need for efficiency improvements.”

Getting more efficient – in transport, industry and other sectors – will save us money and improve our productivity. According to the Energy Efficiency & Conservation Authority, today we could cost-effectively save about $2.5 billion of the $18 billion a year we as a country spend on energy each year. This doesn’t happen for a number of reasons – lack of awareness or training, high up-front costs or bad incentives (for example, landlords don’t have strong incentives to insulate a house). Such changes would take a pretty decent chunk out of our CO2 emissions too.

4. Energy security

One of our biggest imports is oil; at current prices we spend about $7 billion per year on the stuff. In the past we’ve seen geopolitical turmoil leading to oil price spikes, which in turn have a big impact on our economy. The predictions are that, as climate change progresses, this kind of turmoil will increase.

Reducing our dependence on the black stuff – by investing in public transport, electric vehicles and biofuels – would not only reduce our carbon emissions, it would also help prepare us for a more uncertain future. To use the lingo, it is not only mitigation, it is also adaptation. Think of it as an insurance policy for the future that covers us no matter what happens.

5. Stop supporting dodgy Middle Eastern regimes

Maybe you don’t care about money. Maybe you are into human rights, world peace and stuff. Taking action on climate change could help sort that too.

Ever thought about where a lot of the wars are? Where a lot of the dictators are? That’s right – the Middle East, where they have a lot of oil. If we stop buying the stuff, then we stop giving money to dodgy regimes. Over half of New Zealand’s oil imports currently come from the Middle East, which means we’re putting about $3 billion dollars into their pockets every year.

If you are worried about what will happen to those countries without the money from oil and coal, then think again. Often the rest of their economy is paralysed because they make so much money by digging up coal and pumping oil that their high currency prevents any other industries growing. Yes, it’s a bit like we seem to be with dairy and housing. Economies are dynamic, so when they stop selling oil and coal other export industries will have a chance.

6. New industries

Taking action on climate change could create new economic opportunities for our country.

New Zealand is among the world leaders in renewable electricity generation – why not make the most of it? We could sell our expertise to the world – in geothermal generation and managing a renewable grid, for example. We could be a perfect testing ground for electric vehicles and wave power. It isn’t about picking winners, just offering the same favourable policies to renewable energy as the Government currently does to fossil fuels.

The benefits to our economy of being an innovator in environmental technologies is potentially large. PWC reported that the Clean Economy (low carbon and environmental goods and services) could add $12-$27 billion to NZ’s economy by 2025. Richard Branson even offered to locate the Southern Hemisphere HQ of his ‘B Team’ (an environmental innovation hub) here.

7. Our Image

Clean, green, 100% Pure – whatever you want to call it, New Zealand has a reputation as a place with a special environment. In reality we have our low population to thank for this reputation rather than anything we are doing differently. New Zealand’s electricity could easily become 100% renewable (or damn close) – that would be a real selling point for the exporting businesses based here.

There are different opinions on how much this could benefit us in terms of tourism and our food exports. Some studies suggest our clean green image is a big factor, with a value of up to $20b, and about 80% of exporters think it adds some value to their products. Others, particularly commodity producers such as dairy, point to studies done on organic products where people said they wanted it and would pay more, but that demand vanished when people had to put their money where their mouth is. The debate continues, but the latest evidence suggests that for our emerging markets, such as China and India, the environment is more important than ever before.

Our 100% Pure brand appears to have a value. It attracts tourists, talented people and adds a premium to our exports. This value is likely to grow in the future as other countries despoil their environment. If we stayed up with the pack in terms of action on climate change, we could at least maintain our image. If we became international leaders, we might actually deserve it.

8. Reducing our long term bill

The reality is that climate change isn’t going away. Disasters will mount, coastal infrastructure will be deluged, and the costs of the impacts will continue to rise. Banks, insurers, global institutions – even the Pope – are all calling on governments to act with urgency. Some time in the not-too-distant future the tipping point will come. As major powers progressively ratchet up their actions, sanctions could well be in store for the laggards.

New Zealand hasn’t made much progress on reducing our emissions (they’re still growing), and that looks set to get worse as our 1990s forests start to get harvested. Most of Europe has committed to reduce emissions by 40% between 1990-2030, while we have pledged an 11% reduction (with strings attached). Even worse, we don’t plan to achieve that target by reducing our own emissions like the EU, but instead by trading in cheap and dodgy foreign carbon credits. In the meantime our non-existent climate policies will see more high-carbon infrastructure locked in.

Our approach is full of hot air – as evidenced by getting awarded the Colossal Fossil award at the Doha negotiations. At some point, our trading partners will get sick of our carbon emitting ways. The logical response if we continue to drag our feet will be sanctions. We will face the choice between losing international trade and a huge bill to hastily reduce our emissions.

If we start acting now, we would save ourselves a massive bill in the future as a result of having to hastily shift to a low carbon economy. More than that, we’ll also start reaping all the benefits we’ve described in this blog post sooner.

Geoff Simmons is an economist working for the Morgan Foundation. This post first appeared on Gareth's World.