Emissions plan could herald the biggest set of changes in NZ since Rogernomics
ANALYSIS: The nations first Emissions Reduction Plan will be released into the wild today, in what could herald the biggest changes in society since Rogernomics. It will detail the ways in which the Government will reorient the economy towards one that actively tries to drive down emissions to get New Zealand to a position of net-zero emissions by 2050. Rogernomics, named after then finance-minister Roger Douglas, was the overall policy suite that liberated the countrys economy from the dead hand of the state, with the goal of putting consumer choices at the centre of economic life, removing distortions, targeting state support and making New Zealand more competitive by focusing on economic comparative advantage. Todays plan will yank the economy in a different direction again, embedding emissions reduction at its heart. The past four years have been spent getting the legislative architecture in place and now the first plan on the how, where and how much is actually going to be revealed. READ MORE: * We culturally fixed on the hull of the status quo, like barnacles on a sinking ship when it comes to climate change * Government emissions reduction plan not ambitious enough * Government commits to shrinking carbon budgets and new Paris target The plan will effectively lay out the areas of the economy in which either via regulations or subsidies and carrots and sticks will try to drive down emissions. Jacinda Arderns nuclear-free moment has arrived, and now her Government will be tested and probed and prodded on both the commitments within the plan and the mechanisms by which they will be achieved. It will be delivered by the mild-mannered leader of the Greens, and Climate Change Minister, James Shaw. At a brute political level, the question will be how many of the measures announced today are actually going to significantly cut emissions versus how many are really industry policy dressed up as climate policy. In other words, the measures that look cool or are included for ideological reasons, but do little to reduce emissions. The other question will be, in a high-inflation environment how much it is going to all cost , and whether the public will be broadly on side. This will most probably be the biggest and most consequential day of Shaws career. He has had to wrangle 15 ministers over 18 portfolios and all from a position of relative weakness. If Labour hadnt really wanted to do this, he wouldnt have got anywhere. Todays set of announcements will almost certainly be more structurally important than what is announced in Thursdays budget. There will be controversial parts. The still most controversial decision by the Climate Change Commission was not to go down the route of a least-cost emissions strategy, via the emission trading scheme, because of the other economic distortions it would create. The use of international carbon credits unless there is some change also will not be allowed. In common with Rogernomics, this seems to be a Protestant-style no-pain, no-gain type attitude: it is somehow cheating if we buy international carbon credits, even if it is logically consistent and low cost. How much this will all cost and who will bear those costs will be the key things to look out for today and questions asked by the opposition parties. There is risk here for both Labour and the Greens. If the climate medicine is not strong enough, it will seriously disappoint supporters enthusiastic about climate change. If the medicine is too strong, but not apparently effective, middle-of-the-road voters may continue to toy with Nationals cost of living crisis campaign. And worse for Labour, its number one political asset, Ardern, will be at home with Covid-19 .