Of Interest

China's economy remains mired in a post-Covid hangover like much of the rest of the world, but the technology, catering and tourism sectors are encouraging, according to David Mahon.

Mahon, the Beijing-based Managing Director of Mahon China Investment Management, spoke to interest.co.nz in the latest episode of our Of Interest podcast.

The relative weakness of the Chinese economy, compared to its rapid expansion of recent decades, amid ongoing concerns about the property market and deflation, has been making international headlines. Mahon says some of what's going on isn't dissimilar to elsewhere in the world.

"We're going through a period of the post-Covid hangover that the whole world is still going through. We talk about China in isolation. Look at global consumption, look at New Zealand growth rates. They're not great. This is normal. The pandemic was huge. Even the Second World War didn't touch every human being on the planet with the same hand of fear, with the same uncertainty. So I think we need to be patient with ourselves, we need to be patient with the global economy and therefore a little bit with the Chinese economy," Mahon said.

"The isolation, the closure of China for three years had a huge impact. And there are losses and there are contradictions in the system that have been highlighted that really are a challenge to the Government."

Nonetheless he suggests the technology sector is a good engine for the Chinese economy.

"And also given the fact that China is being isolated on technology, there is a strategic reason why China will push that further. So I can see some strong engines. The other one is catering and tourism. Catering is very good for New Zealand because it means that Fonterra will be selling its products to the food services sector," said Mahon.

I also asked Mahon about New Zealand's new government flirting with joining AUKUS, the Australia-United States-United Kingdom security partnership, and what sort of impact this could have on NZ's relationship with China including our trade relationship. This issue gathered momentum after Foreign Affairs Minister Winston Peters and Defence Minister Judith Collins met with their Australian counterparts in early February.

"If New Zealand were to join AUKUS in any form, whether it was phase one or two, it would have an impact, definitely, and it would be a major sign of a change in [NZ] policy of perhaps two generations. So I think we have to wait to see what [Prime Minister] Christopher Luxon says rather than what Winston Peters and Judith Collins say," said Mahon. 

In the podcast Mahon talks further about the NZ-China relationship, the China-US relationship, the Chinese economy, tensions over Taiwan, the Xinjiang region and the Uyghurs, President  Xi Jinping's power, Chinese consumers, the middle class, the potential for more monetary and/or fiscal stimulus in China and more.

*You can find all episodes of the Of Interest podcast here.

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The coalition government's select committee banking inquiry could look at how to encourage banks to lend more to "productive" sectors of the economy rather than having such a big focus on "unproductive" housing lending, Commerce and Consumer Affairs Minister Andrew Bayly says.

The National-NZ First coalition agreement says the government will establish a select committee inquiry into banking competition "with broad and deep criteria to focus on competitiveness, customer services, and profitability."

Speaking in interest.co.nz's Of Interest podcast, Bayly said the government will wait to see what the Commerce Commission has to say in its market study into personal banking services before launching the select committee probe. The Commission's draft report is due on March 21.

"Why have we seen outflows from the productive sector like small businesses, farming and property development which is really important if you want to build houses in New Zealand? We've seen funding going out of that sector, going into what I would term the unproductive sector which is the mortgage market. That's interesting because it obviously has a big impact on businesses and the productive sector," said Bayly.

"Then there are things around margin [and] capital adequacy ratios that the Reserve Bank manages. That will help banks determine where they put their money, and whether they want to invest in more mortgages, or whether they want to invest in supporting businesses."

"I'm approaching it with an open mind. I want to see where they [the Commerce Commission] have got to with retail [banking], but I think inevitably there's some other areas we want to cover," said Bayly.

Under bank regulatory capital rules overseen by the Reserve Bank, banks are required to hold less capital against housing lending than against other types of lending such as business/corporate and agriculture lending. The major lending exposure of all NZ's major banks is housing. ANZ NZ, the country's biggest bank, has 72% of its total lending in housing.

Bayly is also Minister of Statistics, plus Small Business and Manufacturing Minister.

On Statistics NZ, Bayly said it will deliver the 7.5% annual spending reduction the government has asked for. Decisions and preparation are ahead for the 2028 census, he said, noting the 2023 census cost $326 million, "a lot of money."

"I'm wanting to make sure that what we do drives economic growth for New Zealand, how we can power up those businesses. That's the big strategic intent," he said.

"Do you run another huge census every five years? That's the first question. And if you read the Stats NZ] briefing [to the incoming minister] there's a proposal that you don't run those big things again. Because governments all around the world are having the same issue where if you front up to someone now and say 'can you fill out this long form' most of them tell you to naf off," Bayly said.

The next census could look to make more use of administrative data like home addresses or tax returns, he said, information and data that lies within various government entities.

"Obviously they've got to do it within privacy settings. But that is certainly the trend overseas and we will have to look at it.. that you may move towards more localised, small surveys, targeted surveys, and look to buttress that information using existing data sources that are potentially untapped at the moment."

In the podcast Bayly also talks about Stats NZ reporting Consumers Price Index (CPI) data monthly, funding to update the CPI that's overdue, the Credit Contracts and Consumer Finance Act, the conduct of financial institutions (CoFI) regime, buy now, pay later, anti-money laundering rules, and his plans to rewrite the Companies Act.

*You can find all episodes of the Of Interest podcast here.

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New Zealand should be working towards a 100-year planning horizon when it comes to infrastructure, and viewing planning as "an exercise in dynamism and inquisition" rather than a "bureaucratic exercise."

That's the view of Geoff Cooper, General Manager of Strategy at the New Zealand Infrastructure Commission.

Speaking in interest.co.nz's Of Interest podcast, Cooper argues planning gets a bad rap.

"It's seen as a bureaucratic exercise and it should be seen as an exercise in dynamism and inquisition. I think we need to see more of this planning expertise coming into government, and planning happening from a much earlier period of time, front footing the needs rather than waiting for them to be in front of us," Cooper says.

"Getting ahead of the planning cycle is a really obvious place to start. And start identifying options before we get into solutions because the moment a project is announced you've created interests. The moment you announce a project all of a sudden there's interested parties. And once there are interested parties, whatever the project is, it's very difficult to do optioneering, almost impossible."

"So what we would say here is think slow, act fast. Go through a slow, rigorous planning process, identify your problem definition first ... then once you've got a preferred solution which you've stress tested,  then you get on with it and do it as fast as you can," says Cooper.

In terms of the sort of timeframes we should be thinking about for infrastructure planning in New Zealand, Cooper says there's no firm answer.

"But certainly I would be thinking [a] 100-year [time]frame personally."

In the podcast Cooper also talks about the five key drivers of infrastructure demand, NZ's infrastructure deficit, how our infrastructure needs are changing, project selection and delivery, why big projects always seem to cost more and take longer than expected, funding, financing, contestable infrastructure priorities, plus the resilience and sustainability of infrastructure.

"What we're dealing with here is uncertainty and risk. As we're building our new infrastructure what we're seeing are the risks associated with climate change, and the level of resilience that we need, is far higher than what we thought. In fact a lot of our infrastructure is simply not designed for the level of resilience that we need today. And it's going to take decades to get it there as you've seen with things like the earthquake strengthening. The difficult thing with resilience, of course, is out of sight out of mind. It's very difficult to get the acceptance that we need to invest in something that you may or may not need in the future. So it becomes a very difficult thing to sell," Cooper says.

*You can find all episodes of the Of Interest podcast here.

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Although the war on inflation is being won, there are still battles to come and it's too soon to expect Reserve Bank interest rate cuts, says Kiwibank Chief Economist Jarrod Kerr.

Speaking to interest.co.nz for the first 2024 episode of our Of Interest podcast, Kerr says the cost of living crisis is improving for households and businesses.

"We are winning the war on inflation but there are a few battles ahead and a few wins that we need over this year. We think inflation will fall to 3% quite quickly, but the move from 3% to 2% might be a bit awkward later this year and into next year," says Kerr.

On Wednesday Statistics New Zealand's latest Consumers Price Index (CPI) showed annual inflation down to 4.7% in the December quarter from 5.6% in the September quarter. Hot on the heels of the latest inflation data, Reserve Bank Chief Economist and Monetary Policy Committee member Paul Conway is due to give a speech next Tuesday. This will include comments on NZ data released since the central bank's last Monetary Policy Statement in November.

These will be the first public comments from a senior Reserve Bank figure this year. 

"I think we have to have an acknowledgement [from Conway] that the overly hawkish commentary from November is no longer. When you look at what they told us in November, they basically told us they've got no tolerance for upside surprises. We've had nothing but downside surprises since that statement... The GDP report came out much weaker than what the central bank [expected]," Kerr says.

"They gave us a clear indication that if everything goes wrong to the upside that they will hike [the Official Cash Rate] again, and they gave us a 60% probability that they would hike again. I think that was wrong at the time and it has been proven wrong now. And I think Paul may hint that suggestions of another hike in this cycle have evaporated. But equally talk of rate cuts, I think they'll be coming out and say that's premature, that's a conversation for later in the year."

A key area of concern remaining for the Reserve Bank will be non-tradeable inflation, relating to inflation from domestic goods and services. This came in at an annual rate of 5.9% in the December quarter versus the Reserve Bank's 5.7% forecast. Kerr notes much of this is coming from housing related costs such as rents, helped higher by record net migration levels, insurance, and construction costs. In reality the Reserve Bank doesn't have a great deal of influence in the areas of insurance, rates and rents, Kerr says.

In the podcast he also talks about the next OCR review on February 28, whether the Reserve Bank's Monetary Policy Remit to; "achieve and maintain future annual inflation between 1% and 3% over the medium-term, with a focus on keeping future inflation near the 2% mid-point," may need to change in an era of climate change and other challenges, when he expects the Reserve Bank to cut the OCR, the US interest rate outlook, the outlook for the NZ dollar, the inflationary threat from Middle East conflict, and concerns about China.

*You can find all episodes of the Of Interest podcast here.

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Following COP28's call for a transition away from fossil fuels, a key test will be how quickly a rethink of the market capitalisation of oil and gas companies starts emerging, says Rod Oram.

Fresh from attending COP28 in Dubai, Newsroom journalist Oram spoke to interest.co.nz for the latest episode of our Of Interest podcast.

COP28, or the 28th meeting of the Conference of the Parties to the United Nations Framework Convention on Climate Change, was overseen by its president Sultan Ahmed al-Jabar, managing director of Abu Dhabi National Oil Company, or ADNOC, the United Arab Emirates' state owned oil company.

Fossil fuels did, however, make it into the final agreement in a substantial way for the first time at a COP, Oram says. Whilst it's "weaker and slower and less specific [language] than is actually required," it's still significant progress.

The "UAE Consensus" text agreed by 198 countries also includes a global renewables and energy efficiency pledge.

"That does start to send a signal. Not only to governments as they prepare their next commitments under the Paris Agreement, by 2025 countries have to come back with an improved commitment, but it sends a powerful signal to them that they must be working more on fossil fuel reductions in consumption and production, and it also starts to send a stronger message to financial markets," says Oram.

The Paris Agreement is a legally binding international treaty on climate change.

"I think the key test in financial markets, both of that language on fossil fuels but then [also] on this language of a big increase in renewables, is how quickly we start to see a reappraisal of the market cap of oil and gas companies. And how quickly we'll see an appraisal that says 'oh, maybe they aren't going to be producing as much as we thought, say over the next 10 years, because people won't be burning as much because governments have started to shift, consumers have started to shift, renewables are escalating at a rapid pace.' And that to me is going to be the acid test as how soon we start to see that revaluation in the stock market of oil and gas companies," Oram says.

In terms of the annual COP meetings, Oram points out they require consensus across all 198 countries so it's not the place for really big breakthroughs. Instead COP, once a year, provides "a really good scorecard about what the state of play is on all of these issues."

"This isn't anymore just about negotiations between government officials and politicians. This is very much an all-of-society meeting, and that's why the numbers [of delegates attending] were so big this year."

In the podcast Oram also talks about the New Zealand presence at COP28, NZ winning fossil of the day, the first official recognition of and finance mechanism for helping developing countries cope with economic losses and physical damage from storms, droughts, and other climate impacts, the first time there has been a COP declaration on agriculture, and the "deeply, deeply, deeply fascinating" experience of attending a COP in person. Oram also addresses criticism of people flying across the world to discuss climate change, and his hopes for COP29 next year in Azerbaijan.

*You can find all episodes of the Of Interest podcast here.

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By Gareth Vaughan

The first-half of 2024 is likely to be tough with rising unemployment and more businesses failing as the economy "bounces along the bottom," says BNZ Head of Research Stephen Toplis. 

In a new episode of interest.co.nz's Of Interest podcast, Toplis delves into the swathe of domestic economic data from the past week including Gross Domestic Product, migration, Statistics New Zealand's Selected Price Indexes, the Real Estate Institute's latest monthly housing data, the current account deficit, the dovish US Federal Reserve monetary policy review, China and more.

It's tough times for businesses and households are under the cosh, Toplis says.

"Our view has long been that the second-half of 2023 and first-half of 2024 would be the trough in the economic cycle. And I think this [recent data] is confirming evidence of it," says Toplis.

"We're just bouncing along the bottom. And we'll continue to bounce along the bottom, probably until the central bank starts lowering interest rates. So there's more of this really, probably until the second-half of next year."

He notes the economy would look even worse without surging migration, but this is becoming problematic.

"We knew prior to Covid that we were having difficulty as an economy absorbing more than about 50,000 or 60,000 people in a given year. Now we're trying to absorb double that, and that's resulting in things like pressure on your rents, pressure on your housing market, and a pick up in demand in some places that will be difficult to meet," Toplis says.

Thus it's time to "look very closely at tweaking the [migration] settings to moderate those inflows."

Meanwhile, with the new coalition government planning to reduce government consumption aggressively, the reduction in the size of government "is going to be a headwind to New Zealand for some time to come."

"There are quite strong multiplier effects of that because government consumption is largely people employed. So if you reduce the size of the state sector, particularly its employment, it will have multiplier impacts on spending throughout the economy."

"If you think about the last time we had a massive correction in the size of government, that was actually in the early 1990s when Ruth Richardson ran her mother of all budgets as she called it. The sort of decline in government consumption that we're talking about now is of a similar magnitude. Back then it had a very, very big impact on both the unemployment rate and economic activity generally. The broader environment was quite different so it would be remiss to suggest it would be exactly the same impact, but it will be meaningful," Toplis says.

In the podcast he also talks about the inflation outlook, including why we "need to be a little bit careful in being overly concerned about non-tradeables" inflation, the housing market, the labour market, the outlook for interest rates, and more. (See more on tradeable versus non-tradeable inflation here).

"Volatility remains the order of the day unfortunately, and we still have the worst of this economic recovery to get through."

*You can find all episodes of the Of Interest podcast here.

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Reserve Bank Governor Adrian Orr says he's "extremely confident" the world is heading back to a period of low inflation, saying the central bank is prepared to do "whatever it takes" to achieve its mandate of low and stable inflation.

Speaking in in the latest episode of interest.co.nz's Of Interest podcast, Orr talks about the reaction from financial markets to last week's Reserve Bank monetary policy review, what its Monetary Policy Committee members will be watching between now and when they next review monetary policy on February 28, and what the Reserve Bank would need to see to be more relaxed about inflation.

"We just need to repeat we are willing to do whatever it takes to achieve our mandate, [of] low and stable inflation. If we get further inflation shocks there may be more work to do. So we're in a holding position, but we've made it clear where our nerves sit," Orr says.

"Basically we need to see more spare capacity in the economy to have the real confidence that the inflation pressures are coming off. All the indicators are moving in the right direction, but there's a lot of news still to arrive on the table."

He also talks about "historically significant" immigration, noting countries such as Australia, Canada and New Zealand, with strong net inward migration are "having the highest core inflation challenges."

With the new National-led government set to remove the Reserve Bank's requirement to "support maximum sustainable employment," from its monetary policy remit, Orr discusses how different monetary policy might have been over recent years if that hadn't been part of the Reserve Bank's mandate.

Orr also says profit-led inflation, businesses pushing through price increases under cover of news about a major shock to the economy because there'll be less pushback from customers at such times, has been happening in NZ as it has overseas.

"We just used to call that inflation expectations and generalised inflation," Orr says.

"Whenever you've got high inflation people can hide price rises even though it's not something specific to their good or service. They can get away with high or variable inflation, they can start shifting relative prices around, and then that leads to more generalised inflation as input costs rise and wage costs rise and so on."

"And it's that scramble and mess that causes long-term inflation problems. And so I would say all of those things have been happening in New Zealand as they have been everywhere else," Orr says.

"This is the challenge for monetary policy, we have to lean against that desire to tuck a little price increase in behind generalised inflation hoping no one notices. Consumers have to be laser-like focused and think 'is that right, should I be shopping somewhere else?'," Orr adds.

In the podcast Orr also discusses the degree to which Official Cash Rate (OCR) rises are responsible for reducing inflation, inequities involved with monetary policy, whether price controls could be used to help fight inflation, whether the Reserve Bank's monetary policy should be required to support sustainable house prices, what he expects to see from the Commerce Commission's market study into retail banking competition, the level where he'd consider the OCR to be neutral in that it's neither stimulating nor constraining economic activity, his ideal scenario for monetary policy a year from now, and how he's "fully convinced" the world is heading back to low and stable inflation but there may be higher interest rates on average to achieve that.

*You can find all episodes of the Of Interest podcast here.

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On the 22nd of November, while the National Party was putting the finishing touches on its coalition agreement, the European Union (EU) ratified a new trade deal with New Zealand.

It was the latest in a long line of agreements NZ has struck since 1983, but it could be the last. 

Speaking in in the latest episode of interest.co.nz's Of Interest podcast, John Ballingall, a partner at economic consultancy firm Sense Partners, says NZ may have reached “peak FTA” as there aren’t any likely or worthwhile deals on offer.

This jars with the newly-elected National-led government’s promise to “work relentlessly” to smooth NZ’s trade links and open up new markets for exporters. 

Todd McClay, a senior and long-serving National MP, was sworn in as the Trade Minister on Monday and will be tasked with doubling the value of exports in the next 10 years.

Achieving that goal would require an annual growth rate of 7.2%, compared to an historical average over the past decade of roughly 4%. 

The past two years have seen much higher rates of growth but only because various exports have bounced back from very low levels during the era of pandemic restrictions.

National says it'll chase the goal by working to win a trade deal with India and the Gulf Cooperation Council, while also reducing “non-tariff barriers” to make trade cheaper. 

Ballingall says the incoming government needs to put the most resources into that last element. 

A paper he published in October provocatively suggests NZ should “gently say no” to any country looking to start an FTA negotiation, unless it will be clean and fast. 

The exceptions to this rule would be India, the United States, and the Gulf Cooperation Council countries, but none of these are likely to be achieved in the next 10 years.

If any of these deals were to become possible in the future, they would likely be much less lucrative than the China agreement which transformed the NZ economy. This is partly because of the economic and political situation in those countries, but also because the FTA agreement with Europe did not include dairy and meat. 

Ballinghall says the EU deal was “genuinely world leading” in some areas, but it doesn’t offer as much market access for our farming sector as NZ would like. 

“Once you've told the rest of the world that you're prepared to take the deal that's on offer, not your ideal outcome, then that becomes the precedent, almost a starting point for your next set of negotiations,” he says. 

In a press release prior to the election, McClay said the rewards of securing a free trade agreement were large. Two-way trade with China has increased seven-fold since 2008.

Labour had “dropped the ball” on the India trade relationship, he said, but a National government would make it a “priority”.

Ballingall worries that chasing a trade deal with India would use up too many resources that could be put to better use elsewhere. For example, Australia has been negotiating since 2011.

His report recommends focusing on regional trade agreements that include multiple trading partners and attacking less tangible barriers that create costs for exporters. 

Sense Partners estimates the cost of non-tariff measures, such as bureaucratic border regulations, on NZ exporters at about $12 billion. That’s 10 times higher than the cost from the few remaining tariffs.

“The time is ripe for a new trade strategy,” Ballingall says. 

One that focuses more on reducing transaction costs and getting the most out of existing trade deals, rather than focusing on new market access with ever diminishing returns.

While that may be a less charismatic message to deliver to the voting public, it does appear McClay and the incoming government are aware of the need to shift focus. 

“Over the next decade, National will measure the success of our trade policy in the value of exports, not simply by how many new trade agreements we sign,” McClay says, in that same press release. 

The new government has promised a record number of trade missions and a trip to India in the first year, but some in the trade sector will be hoping it also focuses on the less cinematic work of smoothing existing trade links.

*You can find all episodes of the Of Interest podcast here.

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Although trading in foreign exchange markets is inherently very risky, the Reserve Bank (RBNZ) boosting its capacity to do so makes sense both from monetary policy and financial stability perspectives, Westpac New Zealand Chief Economist Kelly Eckhold says.

Speaking in in the latest episode of interest.co.nz's Of Interest podcast, Eckhold whoformerly worked as the RBNZ's manager of foreign reserves and at the International Monetary Fund, says the RBNZ's foreign currency intervention capacity is likely to increase significantly over the next two or three years from the NZ$17.725 billion as of its latest disclosure.

That's even after the RBNZ in July ramped up its foreign currency intervention capacity by almost NZ$4 billion by creating and selling NZ dollars. This followed January's announcement of its new Foreign Reserves Management and Co-ordination Framework (FRCF).

Eckhold points out the RBNZ's total level of foreign reserves hadn't changed substantively since 2008, and the economy's about 80% bigger now and the foreign exchange market has probably doubled in size.

"When you see this rather large and abrupt change in the level of reserves going on here it's a consequence of the fact that the framework hasn't been reviewed for a very long time," Eckhold says.

"We have a well functioning foreign exchange market. The purpose of having the intervention policy for crisis situations is to keep it that way at all times," he says.

From a monetary policy perspective the RBNZ may intervene when the NZ dollar "overshoots or undershoots relative to its justified or fundamental levels." It's a tool available to "lean against some of those really large unjustified deviations in the exchange rate."

"With respect to the crisis intervention role, what it really does is help provide a bit of insurance in the event that some relatively rare but bad situations occur. And one of the good things about insurance is that it makes people probably a little bit more comfortable investing in the country because they feel there's some buffers there that could be used if something bad happens. That probably means all else equal your interest rate's a little bit lower, potentially your exchange rate could be a little bit less volatile, and that's going to be to the benefit of ordinary New Zealanders and firms," says Eckhold.

"For the monetary policy intervention operation to the extent they have some success in helping moderate the cycle, then that would help contribute to reduced instability in output, inflation, [and] the exchange rate itself. And that's also going to be of benefit to everybody over time."

"I calculated the total government foreign exchange reserves at [the equivalent of] about 7% [of] GDP. So we're not talking about something that's going to break the bank here."

In the podcast Eckhold also talks about how and where the RBNZ holds its foreign currency reserves, how much bigger the holding might get, the circumstances under which the RBNZ may intervene, the RBNZ's intervention track record, its hedged and unhedged foreign reserves, and more.

The new FRCF will be reviewed every five years.

*You can find all episodes of the Of Interest podcast here.

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New Zealand should be one of the easiest places in the world to get to net zero greenhouse gas emissions and we should be planning for net negative, the next step after that, says Christina Hood.

Hood, the head of energy and climate policy consultancy Compass Climate, spoke to interest.co.nz in a new episode of our Of Interest podcast. Hood is also the former head of the climate unit at theInternational Energy Agency in Paris.

In the podcast she spoke about the push to net zero by 2050; addressing issues such as what it actually means, what the practicalities of it are, and what it'll mean for the lives and livelihoods of New Zealanders and the economy.

"I think New Zealand is one of the easiest places in the world to get to net zero because of our abundant renewable energy resources, [and] because of the amount of land that could be restored to indigenous forests. A lot of our CO2 [carbon dioxide] emissions since preindustrial times are from land clearance not from fossil fuel use. And we see in Tairāwhiti a lot of land that should never have been cleared, so there's a lot of trees that can go back. We have all of that potential, it's totally doable," Hood says.

"We also have a legal framework in place through our Climate Change Response Act and that sets stepping stones towards 2050 to try and keep governments on track. National has firmly committed to the interim milestones. We have carbon budgets for every five years that step down to meet the net zero target and they've said they're committed to those. And that's actually where things are going to bite because those short term targets hold politicians' feet to the fire in terms of acting now, not just making plans for later."

But, Hood says, when and if we get to net zero we can't rest on our laurels.

"If we do [get there] it's not the end of the story. It's just a particular point that we pass through. Because the science tells us that when we get to that point we would have already emitted too much C02 for the kinds of temperatures that we want to keep our climate systems liveable."

"Even if we get to that net zero we will have emitted too much. The phase after that is actually to be net negative. We're going to have to continue to draw down that excess C02 from the atmosphere through native forest regeneration, but also through technology. And we should be starting to plan for that phase now because it's only a few decades away," says Hood.

In the podcast she explains what net zero means, what the origins of the concept are, the key challenges to getting there, what it means for the agriculture sector, trade and travel, plus feeding the planet, the challenges and targets in big emitters such as the United States, China and India, and also talks about different visions of what net zero means.

"There's a spectrum. [At] one end [there are] extreme techno optimists who say 'new technologies will just replace everything that we currently use and we'll carry on and nobody's going to notice the difference'," Hood says.

"At the other end of the spectrum is an extreme degrowth perspective which says 'technology is just not going to be the answer. What we need to do is to fundamentally reconstruct the way we run society, shrink our energy use until it reaches such a point as we're in balance with nature.' Most climate people, including myself, sit somewhere in the middle."

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