Climate change needs Covid-level urgency from politicians
Z Energy chief executive Mike Bennetts the first guest on Stuff s One Hot Minute video and podcast series sets a challenge for the next Government. OPINION: Back in 2008 I was working for a multinational energy company and was excited about the prospects of transitioning to lower carbon fuels in response to the growing concerns about climate change. By the end of that year the global financial crisis (GFC) had narrowed everyones focus to the economy. Here we are a decade later with another global crisis, in the form of COVID-19, that has us reaching for the same economic playbook. Just like we did in 2008, we are at risk of focusing on the immediate economic crisis and failing to make meaningful progress dealing with the other crisis that is constantly with us: climate change. IAG recently released its latest research into New Zealanders attitudes to climate change . Two findings stood out for me: that more Kiwis place higher importance on climate change than ever before, and at the same time a lot of people are rightly concerned that, as with the GFC, Covid-19 will mean we put climate change action off for yet another day. People within the company I now lead, Z Energy, are concerned about it. Z sells the products responsible for around nine per cent of this countrys total emissions. But selling more fossil fuel is not what gets them (or me) up in the morning. Solving what matters for our customers is, and as the IAG research makes clear, acting on climate change immediately matters to over 70 per cent of New Zealanders. We are constantly walking in a world of paradox. It can be a tightrope walk, but its worth it for the change we aim to create. As Convenor of the Climate Leaders Coalition, CEO of Z and a Kiwi with the future of my whanau on my mind, I believe its critical to put on the record ahead of the election that we need policy that will cause a step change in my industry as a central part of our Covid-19 recovery. My thinking is consistent with the six principles the Climate Change Commission shared in their letter to the Minister for Climate Change on April 7. The passing of the Zero Carbon Act has set our goal of net zero carbon by 2050. But in isolation, its like having goal posts with no ball and no players. The establishment of the Climate Change Commission and the update to the Emissions Trading Scheme are very important, but we havent yet dealt with either of the highest emitting elephants in the room: agriculture and transport. Agriculture may be complex, but transport is not. Lower carbon options like biofuels exist, electric cars exist, policy levers successfully being used overseas exist. At Z, we are across all of these, and know that meaningful decarbonisation is not possible without an all in-approach. We need energy companies, customers, and crucially, government. No one can solve this on their own, and the expectation that private companies shoulder the responsibility and cost of decarbonisation, in the absence of a level playing field, is flawed, and doesnt work. We know this from experience. We invested over $35 million in our biodiesel plant and started producing 10 million litres of low carbon biofuel a year to supply the trucks of partners like New Zealand Post, Dempsey Wood and Fonterra. But in April, we hibernated the plant after our cost to produce it increased by 20 percent at the same time as regular diesel prices fell 20 percent. The economics just werent working and, for most of our customers, cost is still king in the absence of mandated carbon reduction. We tried, we made some mistakes and circumstances worked against us. But what became most clear to us was how critical market certainty is to any low carbon project. We never banked on government support but with hindsight, we needed policy settings that shift the dial towards lower-carbon choices. So, I urge whoever is part of the incoming government to put in place clear mechanisms to level the playing field for low-carbon fuels and vehicles competing against fossil fuels that have enjoyed decades of subsidies globally. We need policies that establish incentives for households and companies with different budgets and different challenges and we need them done with the type of urgency weve seen our politicians and our public service demonstrate in the Covid-19 response. We also need bipartisan support for them, so they arent at risk of becoming political footballs every few years. The longer we wait to decarbonise, the harder and faster we will need to go to keep global warming under the Paris commitment of 1.5 degrees Celsius. So, lets show our rangatahi were not too old to learn, especially when the decisions my generation make now are the consequences they will live with. * Mike Bennetts is the chief executive of Z Energy and the convenor of the Climate Leaders Coalition.