Energy chaos – coming to a market near you

If the great Russian novelist, Leo Tolstoy, had been an economist he might have written: “All happy market outcomes are alike, but each policy error is disastrous in its own way”.

Certainly the implosion of the UK’s energy market manages to combine many familiar bad policy interventions, while nonetheless contriving its own unique set of outcomes.

Continue reading “Energy chaos – coming to a market near you”

So how does the housing boom end?

It’s an old adage that a speculative market collapses not when prices get crazy but when the last person who insists prices are crazy gives up in despair.  

Worth bearing in mind when London’s Financial Times tells us that the pandemic has fuelled “the broadest global house price boom in two decades”, even bigger than the one which preceded and helped trigger the 2008 global financial crisis, and which is understandably reviving concerns about financial stability.

Continue reading “So how does the housing boom end?”

There’s no escape from climate change – and NZ should brace for the tariffs imposed by our trading partners to deal with it

When a magazine as authoritative as The Economist  heads   up   its  lead  “No Safe Place” ,   even  climate  change  deniers  should  sit  up  and  take  notice.

The  Economist”  says  the  most terrible  thing   about the  spectacular scenes of  destruction that  have played out  around  the  world  over recent  weeks  is  that there  is  no  safe place  from  which  to  observe  them.

“The  ground under the German  town of Erftstadt is torn apart like tissue paper by flood  waters; Lytton in British Columbia  is  burned  from the map just a  day after setting  a freakishly  high temperature record; cars  float  like  dead fish  through the streets-turned-canals in  the Chinese  city  of Zhengzhou. All  the  world  feels  at risk,  and  most  of  it  is”.

NZ   had  its  own   headline:  “The  Buller River  recorded  largest NZ  flood  flows in  almost 100  years”.

The  Economist argues  the  extremes of  flood  and fire  are  not  going  away  but  adaptation can  lessen  their  impact.

Greenhouse gas  emissions have produced  a  planet  more  than 1 degree  warmer  than  in  pre-industrial  days. Continue reading “There’s no escape from climate change – and NZ should brace for the tariffs imposed by our trading partners to deal with it”

Climate change just got cheaper – or maybe not …

Britain’s fiscal watchdog – the Office of Budget Responsibility (OBR) – has some good news.  It thinks the cost for the UK of getting to zero carbon could be much less than anticipated:  

While unmitigated climate change would spell disaster, the net fiscal costs of moving to net zero emissions by 2050 could be comparatively modest.”

Under its ‘early action scenario’ government net debt would rise by a mere 20% of GDP in the years to 2050 from the current 105%.  That almost seems encouraging when compared with the near-30% of GDP increase responding to the Covid pandemic , and the roughly 50% surge which followed the global financial crisis.

Continue reading “Climate change just got cheaper – or maybe not …”

Yes, we could try to be world-beaters in tackling climate change, but the reason for wanting to set the pace is unclear

Ministers in the Ardern  government  are getting to grips  with  the  Climate Change  Commission report  which,  if  adopted  in  full, will  reshape the  NZ way of life. Some say if all the  recommendations  the  commission  has  framed  are  applied, it will put NZ in the  vanguard  of the  battle  against global warming.

Just  why this country should want to be  among  the  front-runners,  and  possibly  the first,  to  meet  its  commitment  under  the  Paris  agreement to reach zero carbon emissions   by 2050  is  not  exactly  clear.

Nor may  there  be any  deep  conviction  that  the  Ardern government has  the  capacity to deliver  the   most  appropriate  measures  to  meet  its  climate  targets, given  its  long  list  of  policy  failures  including  Kiwi  Build, wiping out homelessness, eliminating child  poverty, and improving mental health, not to  mention the  Covid  vaccination  rollout.

NZ’s CO2 emissions are considerably less than those in the US and Australia (which is among the highest in the world). Transport makes up 33% of NZ’s “long lived” gases. Continue reading “Yes, we could try to be world-beaters in tackling climate change, but the reason for wanting to set the pace is unclear”

G7 – the view from the top is fine, if a bit fuzzy

The omens were good for the G7 summit at Carbis Bay in Cornwall.  Untypical blazing sunshine and a victory for England’s footballers in the Euro Championships put the hosts in fine fettle (qualified only slightly by the NZ cricketers’ series win).  

The first and most important objective was achieved: the world leaders managed to agree not to disagree. Even better, no one called the host, Britain’s PM Boris Johnson, “weak and dishonest”, no matter how much they might have been tempted.

But despite the 25 page summit communique, direction and leadership was a little harder to find.

Continue reading “G7 – the view from the top is fine, if a bit fuzzy”

How to reduce waste and where to go for public funding to finance your project

Point of Order has been sniffing into waste – or, more precisely, the minimisation of waste – since Environment Minister David Parker announced a $20.5m investment to reduce waste going to landfill in the Bay of Plenty

Parker said the $20.5m had been dished out to the Tauranga City Council from the Government’s Covid-19 Response and Recovery Fund (CRRF) to support essential waste infrastructure projects in Tauranga that also serve the broader Bay of Plenty region.

“Our support to the Tauranga City Council’s city waste infrastructure project is another example of the Government’s commitment to accelerating regional New Zealand’s recovery from the impacts of Covid-19. 

“The project is a collaboration with private industry. It will create jobs and minimise waste going to landfill in the Bay of Plenty.”

But don’t we have a Waste Minimisation Fund for this sort of thing? Continue reading “How to reduce waste and where to go for public funding to finance your project”

There’s a good case for meeting emission targets with free-market remedies rather than central planning

Richard  Prebble,  in his  column  in the NZ Herald, is  dismissive   of the Climate Change Commission’s draft plan to reduce carbon emissions to fulfil  NZ’s  obligations  in meeting the global warming threat.

He contends the commission is proposing to  centrally plan  the economy for the next 35  years — but it’s impossible to plan 35 years out .  “It  would be like today’s economy having been planned in pre-internet 1986”.

Prebble  writes:

“So when faced with an existential  threat  like global warming why would a  government respond by using an economic tool, central planning, that has never worked?”.

The  commission intends

  • The closure of aluminium and methanol production,
  • a switch from coal, diesel and gas to electricity,
  •  dairy, sheep and beef animal numbers reduced by around 15%,
  • phase out imports of light internal combustion  engine vehicles,
  • no further natural gas connections to the grid or bottled LPG, and
  • more walking, cycling  and public   transport.

Continue reading “There’s a good case for meeting emission targets with free-market remedies rather than central planning”

Back to the future: Ardern govt refashions a 2007 commitment to make the state service carbon-neutral

The   government’s declaration of a  national  emergency  on climate change has  taken  symbolism  in politics  to new  heights. It’s  an art form perfected by Prime  Minister  Jacinda Ardern and  the  bulk  of  New Zealanders, it seems,  like it.

Look   at  how she  kept  New Zealanders  free  of  the  Covid-19  virus (albeit with a  bit of expert help  from  Dr Ashley  Bloomfield).

A  problem  with  rising  house  prices? Send  a  letter  to  the  Reserve  Bank  governor.

Too  many  children suffering   in  poverty?  Increase   benefits:  problem solved.

So  too  with    climate  change:  First  step,  make  the state  sector  carbon-free.

The  public  cheers. Opposition  politicians who dismiss it are rubbished as  carping critics. Continue reading “Back to the future: Ardern govt refashions a 2007 commitment to make the state service carbon-neutral”