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”
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?”
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”
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 …”
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”
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”
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”
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”.
“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”
A benefit of Brexit is that Britain will have more scope to make better policy choices. That doesn’t necessarily mean they are going to be made.
Continue reading “Big problem if Britain’s climate change numbers don’t add up. Bigger if they do”
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”