The Kākā by Bernard Hickey

TL;DR: Here’s the top six news items of note in climate news for Aotearoa-NZ this week, and a discussion above between Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer:

* A new study published this week in the journal Frontiers in Science shows methane emissions are growing much faster than projected and that rapid reductions are necessary if the world is to stay on track to limit warming to 1.5˚C or 2˚C.

* The research emerges at a critical time for Aotearoa as two reviews of methane targets are currently underway, one by the Climate Change Commission and another by a panel newly formed by the Coalition Government.

* The researchers argue that the alternative climate metric GWP* has been misused to support inequitable claims that current levels of methane emissions cause ‘no additional warming’. The coalition Government’s newly formed panel, tasked with reviewing the country’s methane target has the principle of ‘no additional warming’ embedded in its terms of reference, suggesting that the Government, and an agricultural industry that is eagerly anticipating a downward revision to its targets as a result of the panel’s work, are unlikely to welcome the latest research.

* Air New Zealand announced that it was abandoning its 2030 targets and withdrawing from the Science Based Targets Initiative (SBTi) this week. It is the first global airline to join the headlong rush out of the SBTi as 2030 gets uncomfortably close.

* The SBTi itself released a set of reports as a first step toward reviewing its standards, after indicating earlier this year that it was considering reversing its advice against the corporate use of voluntary carbon offsets to achieve Scope 3 emissions targets, causing uproar and a staff revolt. Far from clarifying the organisation’s position, the reports find ‘mixed evidence’ for the effectiveness of carbon offsets.

* Pressure is growing to provide more ways for organisations and states to obscure the confronting reality that they are failing to take sufficient action to remain on track to achieve Paris Agreement targets.

(See more detail and analysis below, and in the video and podcast above. Cathrine Dyer’s journalism on climate and the environment is available free to all paying and non-paying subscribers to The Kākā and the public. It is made possible by subscribers signing up to the paid tier to ensure this sort of public interest journalism is fully available in public to read, listen to and share. Cathrine wrote the wrap. Bernard edited it. Lynn copy-edited and illustrated it.)

1. Methane emissions under increasing scrutiny

New research out this week shows anthropogenic methane emissions have been growing much faster than projected, particularly since 2006. They have been responsible for about half of planetary warming between the pre-industrial period and the 2010s but have received far less attention compared to carbon dioxide.

It is now becoming increasingly clear that reducing methane emissions is a critical component, alongside decarbonisation, of achieving global climate goals.

The article by lead author Professor Drew Shindell of Duke University and a group of 14 other international climate scientists says that methane emissions need to drop rapidly, if we are to limit global warming to 1.5˚C or 2˚C.

2. Research comes at critical time for NZ

The study has emerged at a critical time for policymakers in Aotearoa.

Two reviews of our methane emissions targets are currently under way – one by the Climate Change Commission and another by a separate panel newly formed by the Government as part of their coalition agreement.

The terms of reference for that panel are to provide advice on what the target should be that ‘is consistent with the principle of no additional warming’. That framing has been called into question by the latest research.

The researchers argue that the alternative climate metric GWP* has used to support the claim that current levels of methane emissions are not a pressing issue requiring targeted action.

The GWP (Global Warming Potential) index was developed to allow comparisons of the global warming impacts of different gases, in order to decide how much effort should be put into reducing the levels of different greenhouse gases. It compares the ability of the various gases to trap extra heat in the atmosphere over time relative to carbon dioxide (CO2). GWP* is a new measure that takes account of the different atmospheric lifetimes of short- and long-lived gases, better capturing their different warming effects.

Responding to the study, Professor Robert McLachlan, Distinguished Professor in Applied Mathematics at Massey University commented,

"Shindell et al. suggest that the alternative climate metric, GWP* has been misused to argue that current levels of methane emissions cause 'no additional warming', and that this 'ignores emissions responsible for roughly half the warming to date and appears to exempt current high methane emitters from mitigation. This is neither equitable nor consistent with keeping carbon budgets within reach.' Two of the five members of the new methane review panel were authors of the original GWP* study.

3. NACT Govt has latched onto that narrative like a life raft

The narrative of ‘no additional warming’ was sold to the current coalition government ahead of the last election and they appear to have swallowed it hook, line, and sinker.

The agriculture industry has been hoping to reel in reduced methane targets, just as the world wakes up to the increasing threat posed by short-lived gases.

The new research will likely go down like a cup of cold sick across the current government and the agriculture industry, as their preferred narrative comes under fire by an influential group of international climate scientists.

The article suggests that the likely source of the recent and abrupt acceleration in methane emissions is from wetlands, in a worrying response to increased warming, along with additional contributions from fossil fuel use. Both of these results mean that anthropogenic emissions must decrease more than expected to reach warming goals.

The researchers support a split gas approach, as has been implemented in Aotearoa New Zealand, saying that a net-zero target specifically for methane is neither necessary nor plausible. Acknowledging the additional difficulties of reducing agricultural methane emissions, they nonetheless suggest a global sectoral target that reduces emissions 20% by 2030 and 30% by 2050.

Also worth reading is a viewpoint on the article that accompanied its publication in the Frontiers in Science journal, penned by Climate Change Commissioner Andy Reisinger. Reisinger points out that the sectoral targets above were derived from scenarios that assumed rapid and deep cuts in all emissions from 2020 onwards. As these have not yet materialised, future emissions reductions, including those for agricultural methane may need to be even stronger than the article suggests. He also emphasises the relationship between methane (CH4) and carbon dioxide (CO2) reductions, the value judgements that drive their related targets and explains why competing narratives about methane can be challenging for policymakers to parse

The many connections between CH4 and CO2 that Shindell et al. discuss also make clear that if individual countries or sectors do adopt separate emission targets for long- and short-lived gases, such targets cannot be set in isolation from each other to achieve an overall climate goal. How we slice the global emissions pie to serve a highly uneven world depends on value judgments about equity and pathways for sustainable development, not physics. Separate targets for short- and long-lived gases provide greater transparency in emissions and actual climate outcomes but also imply dual political fronts for lobbying and renegotiation. Separate targets also reduce flexibility for accommodating underachievement in individual sectors and therefore increase the risk of failure. Whether combined or separate targets lead to a more durable and ambitious climate response overall will thus depend on country- and sector-specific circumstances as well as uncertainty about future technologies to achieve individual targets decades into the future.

A media release accompanying the article’s publication provides a final word from its lead author,

The scientists lay out three critical imperatives for action, backed by analyses of satellite remote sensing data, reported methane emissions, and the interaction of abatement options with market forces. Firstly, we need to bring methane emissions down. Secondly, we need to coordinate efforts to tackle methane and carbon dioxide emissions—only cutting carbon dioxide won’t stop warming quickly enough, but only cutting methane just delays global heating. Thirdly, we need to incentivize and enforce methane abatement.

This is a life-saving, cost-effective measure. Estimates indicate that every tonne of methane emitted in 2020 caused US$470-1700 of damages. But this may be a significant underestimate: taking into consideration the effect on air pollution that damages human health, the true cost could be up to $7,000 per tonne—and rising.

“The benefits of methane mitigation nearly always outweigh the net costs,” explained Shindell. “Many methane mitigation options provide net economic gains even without accounting for environmental impacts.”

Adding that,

“People can make sure they avoid over-consumption of beef and dairy, and compost their organic waste whenever possible,” said Shindell. “If it’s not possible where they live, they can vote for those who’ll create programs for composting in their towns. They can also vote for those who will make polluters pay for methane emission rather than letting them profit while society picks up the tab for the damages they’re inflicting.”

4. Air NZ leads the way … not in a good way

In other news this week, Air New Zealand announced it was abandoning its 2030 targets, becoming the first airline to join the rush to exit the Science Based Targets Initiative (SBTi).

The SBTi (jointly run by the United Nations Global Compact and NGOs including the World Resources Institute, and WWF) supports large organisations to take meaningful climate action by ensuring their targets are aligned with the science that aims to limit global warming to well below 2˚C.

The SBTi requires companies to have targets for both 2030 and 2050, with many companies feeling the pressure as the former approaches.

5. STBi reports find ‘mixed evidence’ on offsets

In March, SBTi removed 239 organisations from their net zero commitments dashboard, having failed to validate their “commitment”.

The list of removed companies included industry giants like Microsoft, Procter & Gamble, Walmart and Unilever. Commitments relating to Scope 3 emissions (those emissions in a company’s supply chain that it does not directly control) proved to be the major obstacle.

This was closely followed in April by the SBTi Board’s disclosure that they were considering reversing the organisation’s long-standing opposition to the use of carbon offsets by companies to achieve their Scope 3 targets, in an approach favoured by one of its key financial backers the Bezos Earth Fund. The announcement caused an immediate revolt amongst internal staff. 

This week the SBTi released a hotly anticipated set of reports in its first step toward revising its standards. Far from clarifying the next steps for the SBTi, the review finds ‘mixed evidence’for the effectiveness of carbon offsets, pulling up short of any actual recommendation for changes to the SBTi’s Corporate Net Zero Standard.

In between events, a United Nations taskforce leaked their draft report, revealing that they were about to come out in opposition to the use of carbon credits from the voluntary market by companies, as reported here last week.

6. Pressure & division grows over reduction targets

Climate Commissioner Andy Reisinger makes an appearance in this saga as well. He is the lead author of a paper published in the journal Nature last week, criticising the Science Based Targets, arguing:

Such a narrow conceptualisation of science to guide and justify targets for individual companies or countries is misleading. Simplistic use of global averages taken from IPCC reports, used out of context and generically applied to a broad diversity of individual actors, leads to inefficiency and inequity, higher emissions and more warming than intended. Indeed, such a generic approach is the very opposite of using science to inform actions consistent with the objectives of the Paris Agreement.

Further, Reisinger et al. argue strongly for the inclusion of social sciences and humanities in target setting,

To address the multiple dimensions of equity associated with climate mitigation targets for individual actors such as companies or countries, social sciences and humanities need to become a core part of the science that informs target setting, including economics, political science, socio-technical transition theory and ethics. This requires embracing the wide range of actions that can contribute to the mitigation goals of the Paris Agreement, as opposed to hobbling acceptable actions by narrow and arbitrary decision-making rules.

The temperature is rising as 2030 approaches and one-by-one, organisations and countries are being forced to reveal whether they are actually on track. The fierce battle being fought over emissions reduction targets will determine whether society faces up to the confronting reality that we are failing to address climate change sufficiently to keep warming below 2˚C (let alone the still official target of keeping it near 1.5˚C) or whether spin and greenwash will be enabled to continue obscuring that harsh truth.

Ka kite ano

Bernard and Cathrine

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy in the last day are:

* The National-ACT-NZ First’s budget cuts are now clearly biting into front-line services and staff across the hospital and welfare system, contrary to promises made before the election that tax cuts would be paid for by painless ‘back office’ cuts to spending;

* Unfortunately and often tragically, the spending cuts and various politically-driven (ie evidence-lite) decisions are storing up future deaths, accidents, pollution, emissions debts, hospital admissions and overtime costs for future budgets and Governments to deal with;

* In solutions news, China’s LDV just slashed the price of its electric double-cab ute to $41,990, making it cheaper than other new electric cars and diesel utes;

* In chart of the day, Treasury forecasts a slump in capital expenditure requests in the next three years as officials scramble to meet the directions of the new Cabinet to avoid spending now, in order to pay for tax cuts that began this week;

* In quote of the day, the new Groceries Commissioner has been forced by an intransigent supermarket duopoly to review its new code for suppliers, who are still being bullied and squeezed; and,

* In climate graphic of the day, a new global warming analysis shows the acceleration in temperatures over 2023 and 2024 may have slowed in recent months, but not enough to be sure the worst is over.

(Full paying subscribers can see and hear more detail, analysis and commentary in my podcast above and below the paywall fold. They also have access to my daily Pick ‘n’ Mix of links elsewhere and The Kākā’s daily Journal of Record below. If we get more than 100 likes, we open these articles up for full public access and sharing online.)

Top Six Things to note on Friday, August 2:

1. The mask comes off: this is an austerity Government

Election promise to only cut back-offices dissolves into front-line cuts

This week the Government’s promise to only cut back-office staff and to keep existing publicly-available services in health and education finally dissolved in front the nation’s eyes, with numerous examples where any pretense was dropped, or the opposite was so obvious it couldn’t be denied.

Here’s examples from today alone:

* Scoop: Proportion of Health NZ staff in ‘back office’ roles falling, not rising. The Post-$$$’s Tom Pullar-Strecker

* News: Hundreds more doctors could be trained if government funded them - report RNZ

* News: Fewer pharmacists stock Covid-19 anti-viral drugs after funding cuts RNZ

* News: Kāinga Ora to slash Māori-focused housing team in half RNZ

* News: Children’s Minister defends cuts to Oranga Tamariki service providers. Stuff understands one charity, Family Start, is expected to lay off more than 100 staff. They work with pregnant women and young families to ensure they’re ready to look after their children. Stuff’s Tova O’Brien

2. The feedback loops worsening the services deficits

Repeatedly, the Government has chosen to cut capital expenditure and spending plans in ways that makes the Budget look better this year and helps pay for Budget 2024’s tax cuts that kicked in this week. They’ve also changed policies that appear to allow the economy to grow faster in the short term. But both moves just build and shift bigger costs that will have to be paid in later years.

The old adage of penny wise and pound foolish often applies, as in these cases identified from today alone:

* News: 'Lives at risk': Trauma surgeon fears speed limit increases will drive up deaths NZ Herald

* News Doctors told to make beds, clean commodes amid hospital staff shortage RNZ

The other area of short termism is in the sacking of scientists:

* News: Workers monitoring natural hazards among GNS scientists facing axe NZ Herald

* News: 'Sleepwalking into a climate disaster': NIWA scientist's parting shot RNZ

Olaf Morgenstern finished up after 15 years at NIWA last Friday - one of four experts culled from a 10-person climate modelling team.

His expertise has already been snapped up by Germany, and Morgenstern has left New Zealand with a warning: climate science in this country is under threat.

We do this science for the public good, not necessarily just our own country's good; climate science is very much an international endeavour.

"We would be truly in dire straits if everybody else followed New Zealand's commercial ideology because we'd be sleepwalking into a climate disaster."

3. Solutions news: $41,990 for an electric double-cab ute

This is encouraging, via Matthew Hansen at Stuff. China’s LDV has cut the price of its run-out model of electric double-cab ute to $41,990, which makes it cheaper than electric cars and cheaper than equivalent diesel utes.

After another round of discounts, LDV's e-T60 (which is, so far, the only electric ute on sale in New Zealand) is sitting at $41,990, nearly a 50% drop on its initial price of $79,990.

This positions the eT60 ahead of the likes of the recently discounted prices of the GWM Ora ($42,990), BYD Dolphin ($43,990), MG4 ($46,990), and the Omoda E5 ($47,990).

LDV's price drop could be to clear existing inventory ahead of a next-generation update, which was shown off overseas recently, but we've had no indication of a hard launch, let alone when local stock might land. 

None of the major manufacturers - Ford, Toyota, Mitsubishi - have indicated when an electric ute will land from them. Ford has the plug-in hybrid Ranger on its way, Toyota has a mild-hybrid Hilux already on sale, and Mitsubishi is reportedly following Ford's footsteps, although it hasn't officially said anything.

And a bonus bit of news on this front:

News: Samsung Just Showed a 600-Mile Solid-State EV Battery, Charges in 9 Minutes Rideapart

4. Chart of the day: This is the (lack of) ambition.

Officials dial down capex funding requests

5. Quote of the day

Surprise. Surprise. Duopolists don’t give up power easily or quickly.

“The Commission is starting the review less than a year after the Code came into effect as there are concerns that systemic issues are not being addressed and suppliers may not be benefiting from the full protections of the Code due to built in carve out provisions.” Grocery Commissioner Pierre van Heerden announcing a review of the new Grocery Supply Code less than a year after it was enacted and well before the two-year deadline for a review.

6. Climate chart of the day

Phew? Not really. The jury is still out, says Zeke Hausfather

I take my cues on these issues from Zeke Hausfather, who writes for CarbonBrief and has an excellent substack called The Climate Brink. Here’s his latest on whether the amazing temperatures are something unnerving.

Earlier this year NASA’s Gavin Schmidt and I separately wrote that the evolution of global temperatures in 2024 would be important to tell us if the “gobsmacking” conditions we saw in the latter half of 2023 represented a new persistent condition for the climate or more of a temporary phenomenon.

Gavin suggested that we would have a better sense by August if conditions were stabilizing or the climate was heading into “uncharted territory”.

With August almost upon us we remain in something of a liminal space. Both June and July were notably warmer than I expected earlier in the year (coming in 0.4C and 0.3C respectively above the last big El Nino year of 2016). At the same time, we have moved out of record territory, and we still expect some additional cooling influence from fading El Nino conditions and potential La Nina development.

So I think we will still have to wait and see, though if the spike in temperatures over the past few weeks persists to push August 2024 to set a new record it would be a worrying sign. Zeke Hausfather via The Climate Brink.

The best of the rest

News and opinion elsewhere on August 2

Here’s my Pick ‘n’ Mix of the top six news, analysis, deep-dive and opinion links elsewhere as of 8:00 am on Friday, August 2:

* Analysis: Show me the money: an apology is fine, but will there be compensation for abuse victims? The Post-$$$’s Steve Kilgallon

* Analysis: No, Māori aren't taking over NZ's beaches. The foreshore and seabed debate is back in the public discourse - and so are the misconceptions that Māori want to block access to beaches. 1News’ Te Aniwa Hurihanganui

* News: Christchurch City Council gives up on missing $78m for public transport. The Press-$$$’s Keiller MacDuff

* News: Family mulls moving to double accommodation supplement RNZ

* News: Health NZ drops tool that factored in ethnicity for waitlists, despite review findings RNZ

* News: Banks relax borrowing test rates RNZ

The Kākā’s Journal of Record for August 2

Here’s the top six announcements, reports, news conferences, statistics & surveys in the last day to 8:00 am on Friday August 2:

* Poverty: Arotuki Tamariki the Independent Children's Monitor's report details how multiple government agencies failed to protect 5-year-old Malachi Subecz before he was murdered by his carer. It also finds that government agencies haven't implemented recommendations made eighteen months ago in order to protect similarly at-risk children. News: RNZ, 1News

* Health: A PwC report commissioned by Universities of Otago and Auckland finds that their medical schools have the capacity to train around 300 more doctors a year with extra government funding. Budget 2024 confirmed 25 funded medical places for 2025. News: RNZ, 1News

* Education: A Ministry of Education consultation document proposed grouping financially weaker polytechnics into a federation receiving educational programmes and ‘back-office support’ from the Open Polytechnic. Polytechs with a ‘clear pathway to financial sustainability’ would remain autonomous entities. News: RNZ

* Infrastructure: Transpower's report on the collapse of a Northland power pylon found it was caused by a poorly trained and supervised worker removing nuts from three of the four pylon's legs. Evidence also suggests Omexom workers failed more than once to follow the standard procedure of removing nuts from only one pylon leg at a time. News: RNZ, Stuff

* Treaty: Ngāti Whātua filed High Court proceedings challenging the Government's plans to tighten the criteria for applications for customary title over marine areas. Ngāti Whātua says that their claims for customary marine title in the Whangārei Harbour and Whangārei Coast would be overturned under the amendments to the Marine and Coastal Area Act. News: Stuff

* People moves: Treasury chief executive Caralee McLiesh has been appointed Australia's Auditor-General. Finance Minister Nicola Willis had a lot of input into advertisement for the vacancy published yesterday. News: NZ Herald

And finally, some fun things

Cartoon of the day: Know the feeling

Timeline-cleansing nature pic

‘Hey! I bought the stick back for you! I’m amazing!’

Mā te wa

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy in the last day are:

* Two former directors of Te Whatu Ora-Health NZ have publicly accused PM Christopher Luxon of trying to mislead the public over the merged entity’s finances, including one who worked as an executive with him at Air NZ and a former Medical Council chair. Also, another former Health NZ director was anonymously scathing this morning, calling Luxon’s comments about directors not knowing the organisation’s financial details as “completely baseless”;

* A global survey of construction companies was published today showing New Zealand’s builders were the world’s most depressed in the just-completed June quarter because of the new National-ACT-NZ First Coalition Government cancellations of multiple construction projects and spending cutbacks;

* In solutions news, Te Pāti Māori is proposing a new law to make Waitangi Tribunal rulings binding on The Crown. Meanwhile, Ngāti Whātua Orākei, one of the recipients of historic treaty settlments after Tribunal findings, launched plans to build Aotearoa’s tallest building and create an investment exchange for other iwi to invest capital in projects across Tāmaki Makaurau;

* A major new study has found an acceleration in methane levels globally in the last 20 years, driven partly by a rise in emissions from wetlands heated up by previous global warming. The study’s authors warned this feedback loop created a risk of much-faster climate change and called for immediate and massive reductions of methane levels from pastoral agriculture as the fastest and cheapest way to reduce the immediate heating effects of methane;

* In quote of the day, a social investment expert has called for the abandonment of the new Government’s plan to pull Treaty provisions out of the Oranga Tamariki Act, known as 7AA, arguing leaving the provisions would save the Government money in the long run, let alone prevent social harm in the short term; and,

* In climate graphic of the day, Fresh data collected in the last week shows global ice levels hit record lows for this time of the year, consistent with global temperatures accelerating faster than expected past 1.5 degrees over pre-industrial levels.

(Full paying subscribers can see and hear more detail, analysis and commentary in my podcast above and below the paywall fold. They also have access to my daily Pick ‘n’ Mix of links elsewhere and The Kākā’s daily Journal of Record below. If we get more than 100 likes, we open these articles up for full public access and sharing online.)

Top Six Things to note on Thursday, August 1:

1. Directors accuse PM of ‘disinformation’ on financials

Two former Te Whatu Ora-Health NZ directors until the end of June, former Medical Council Chair Dr Curtis Walker and professional director Vanessa Stoddart, have accused PM Christopher Luxon of disinformation and misinformation respectively with his comments on Monday that Health NZ’s directors didn’t know the organisation’s financials and weren’t asking the right questions.

Another former director anonymously accused Luxon of making “completely baseless” comments about what the directors knew and when.

The first comments emerged late on Tuesday from Dr Walker, a kidney specialist and former Medical Council Chair. He was quoted by NZ Doctor’s Martin Johnson as saying the accusation was a “casus belli,” and “an excuse to put a commissioner in, which I don’t think was warranted.” He added:

“It’s interesting that as the political pressure has come on the Government and the prime minister, they have sought to up the ante on their disinformation frankly. And they’ve got it wrong as was shown, for example, by the ’14 layers of management’ comment.

“They haven’t got their facts straight and they weren’t sitting around the board table and they also don’t work in the front line of the health service like I do.

“As the political pressure has come on the Government, they have been increasingly desperate in casting about for misinformation.” Dr Walker via NZ Doctor

Dr Walker made further comments in this front-page article in NZ Herald-$$$ this morning by Isaac Davison and Adam Pearse:

“I think it’s inaccurate that the board’s financially illiterate. And I disagree that the board lacked financial skills and oversight. All of the questions that are being asked now publicly were asked around the board table of the management.

“You might argue with a few senior clinicians coming off the board that it might now be seen as clinically illiterate.” Dr Walker via NZ Herald-$$$

Former Health NZ board member Vanessa Stoddart was also quoted in the NZ Herald article as saying she was disappointed by the “personal comments” made by the Luxon, but noted “blame and misinformation would not fix the health system.”

She said the deficit was largely a result of “unbudgeted recruitment of nurses”, which needed to be funded by reducing non-frontline roles or overtime levels.

Stoddart is also currently on the boards of major private sector companies Waste Management NZ and Channel Infrastructure and was a board member of the Financial Markets Authority for seven years until March this year. She was Group GM for Technical Operations and People at Air NZ for nine years until January 2013, which meant she worked with Christopher Luxon, who was first Group GM International Airline from May 2011 to the end of 2012, before becoming CEO.

‘Baseless comments by Luxon absolutely refuted’

Dr Walker agreed with comments by Stoddart and Health NZ CEO Margie Apa that a big factor was being over-budget on the number of nurses employed.

“That’s pay settlements, pay equity and that’s before you even get on to the really important stuff like pay parity with primary care and the community sector.” Dr Walker

Another former Health NZ board member commented anonymously in the NZ Herald article, saying he “absolutely refuted” the PM’s comments.

“I feel that it’s completely baseless. He (Luxon) doesn’t know the reports we were getting, or the discussions we were having. He or ministers haven’t taken time to speak to the board about the issues.” Former board member.

Luxon did not directly respond to questions from reporters in Parliament about Walker's rebuttal.

"What I say is, I am here to deliver better health outcomes for New Zealanders, and I am ruthlessly focussed on that, and I am making sure that going forward, I am doing everything I can to improve the governance of Health New Zealand."

When asked whether his claims about the directors being ‘financially illiterate,’ he said: "I expect results, I expect governance and boards to understand what's going on in those entities."

Luxon comments were surprising, also given one of the directors is Naomi Ferguson, who ran IRD for a decade. Benedict Collins of 1News (video below) also cited leaked board emails pushing back at the Government’s claims.

2. New Government’s funding freeze slams building sector

NZ construction sector most depressed in the world in June quarter

The Royal Institution of Chartered Surveyors (RICS) Global Monitor survey of activity and expectations in the construction sectors of the world’s major markets reported this morning its June quarter survey found New Zealand’s construction sector was the most depressed since the survey started and was the most depressed in the world. Respondents cited poor demand and credit availability.

Here’s how RICS described New Zealand in its global news release (bolding mine):

“The RICS quarterly monitor paints the picture of a global construction sector in recovery. Some impediments remain in terms of build costs, finance and skills shortages, but most key markets are ticking-over with modest but positive growth driven in large part by infrastructure projects.

“New Zealand stands out for remaining decidedly downbeat. Expected workloads over the coming twelve months are the lowest in the world. Alongside China, they have been the lowest in the world over the past three months. It should come as no surprise therefore that headcounts are down over the past quarter and anticipated to fall further.

“Respondents to the monitor cited continued challenges with high inflation, high interest rates, high competition and the change in Government in October 2023 which has resulted in cuts, delays and policy change. Jones Lang LaSalle Head of Strategic Advisory, Government and Public Sector, Jonathan Manns.

The survey report included the following verbatim comments from New Zealand and their location, with more than half citing the change of Government:

‘Major changes in central & local government policy. Lack of funding.’ - Auckland ‘Government and interest rate levels.’ - Auckland

‘Change in Government and priorities have delayed and postponed infrastructure projects which has impacted in certainty in the construction market.’ - Auckland

‘Change in government has slowed down / stalled climate policy change.’ - Christchurch

‘Cuts by the new government impacting public sector and economy.’ - Christchurch

‘Change of government in Q3 2023 has halted many projects, the market is holding off on investment while waiting for government decisions. Increased interest costs and mortgage costs have negatively impacted housing developments and some long-standing developers have ceased trading.’ - Hamilton

‘Competition and general lull in business driving prices down and making some tenders financially risky or impossible. New government changes, funding pulled in schools and the public sector. Private industry being tight.’ - Hamilton

3. ‘Slash methane now try to stop feedback loop’

Major study finds methane a major warming culprit, and worsening

A major new study published yesterday in Science found methane emissions increases in the post-industrial era are responsible for around 65% as much warming as carbon dioxide has caused to date, and large reductions in methane emissions are required to limit global warming to 1.5°C or 2°C. It noted a warming climate was most likely the reason for a sharp increase in methane emissions from wetlands and pleaded for immediate and massive reductions in man-made methane emissions, starting with sheep, beef and dairy farming on pasture.

Here’s the key points from the paper (bolding mine):

The atmospheric methane growth rates of the 2020s far exceed the latest baseline projections; methane emissions need to drop rapidly (as do CO2emissions) to limit global warming to 1.5°C or 2°C.

The abrupt and rapid increase in methane growth rates in the early 2020s is likely attributable largely to the response of wetlands to warming with additional contributions from fossil fuel use, in both cases implying that anthropogenic emissions must decrease more than expected to reach a given warming goal.

Rapid reductions in methane emissions this decade are essential to slowing warming in the near future, limiting overshoot by the middle of the century and keeping low-warming carbon budgets within reach.

Methane and CO2 mitigation are linked, as land area requirements to reach net zero CO2 are about 50–100 million ha per GtCO2 removal via bioenergy with carbon capture and storage or afforestation; reduced pasture is the most common source of land in low-warming scenarios.

Strong, rapid, and sustained methane emission reduction is part of the broader climate mitigation agenda and complementary to targets for CO2 and other long-lived greenhouse gases, but a net zero target specifically for methane is neither necessary nor plausible.

Many mitigation costs are low relative to real-world financial instruments and very low compared with methane damage estimates, but legally binding regulations and widespread pricing are needed to encourage the uptake of even negative cost options.

4. Solutions: Ngāti Whātua launches investment exchange

Ngāti Whātua Ōrākei, which has built up a property portfolio across Tāmaki Makaurau worth over $1.5 billion, last night announced plans to build Aotearoa’s highest skyscraper on the current site of the Downtown Carpark with Precinct Properties, the listed NZX-listed company that owns and runs the adjacent Commercial Bay complex.

Ngāti Whatua also announced would also launch an investment platform, Te Tomokanga ki Tāmaki, for other iwi to invest in similar projects across the city. Its first investment opportunity would be the redevelopment of the Downtown Carpark site into a 56-storey complex that would be the highest full building, other than the SkyCity spire.

“As tangata whenua and iwi of the Waitematā, Ngāti Whātua Ōrākei holds a deep responsibility to manaaki, to care for and uplift our own people and the people living in Tāmaki. Through Te Tomokanga ki Tāmaki, we are creating pathways for joint iwi investment, sharing in the economic prosperity of Tāmaki Makaurau, Aotearoa's economic powerhouse to achieve our shared purpose.

“We’re excited to work in partnership with Precinct Properties to facilitate iwi investment into the redevelopment of this site. This iconic and generation-defining development is a remarkable opportunity to launch Te Tomokanga ki Tāmaki,” Ngāti Whatua Deputy Chair Ngarimu Blair said in the news release.

In my view, perhaps the politicians currently fighting to strip Treaty provisions from various pieces of legislation should look at how some the fruits of Waitangi Tribunal work are now transforming our cities and generating wealth for all. Auckland, Hamilton and Christchurch are all now thriving thanks to investments by Ngāti Whatua, Tainui and Ngai Tāhu, just as one example of partnerships at scale.

5. Quote of the day

‘Leave 7AA in to save everyone money, let alone the social pain’

“If we look at it purely from an economic standpoint, the retention of 7AA will result in fiscal and economic benefit.

“The cost of remediating damaged adults is significantly higher than the cost of not causing the damage in the first place with children.” Social investment expert, Habilis MD Kent Duston via RNZ’s Lillian Hanley in this article: ‘Removal of 7AA could lead to higher costs for the state, consultant says’

6. Climate chart of the day

Global sea ice hits record lows for this time of year. Ever.

The best of the rest

News and opinion elsewhere on August 1

Here’s my Pick ‘n’ Mix of the top six news, analysis, deep-dive and opinion links elsewhere as of 9:00 am on Thursday, August 1:

* Scoop: Christopher Luxon to cash in on capital gains. The PM has found success in a very Kiwi investment strategy: buying rental properties. But after riding more than a decade of market gains, he’s moving to sell. The Post-$$$’s Thomas Manch

* Deep Dive: New CO2 record at Wellington station RNZ’s Kate Newton

* Scoop: Health NZ apologises after nurse graduate job offers retracted NZ Herald

* Investigation: The mysterious and quiet closure of a once loud, proud charity. A high-profile social services agency that attracted millions in government funding has gone under. What went wrong? Stuff’s Paula Penfold

* Explainer: Where have all the doctors gone? A lack of doctors to cover shifts at Dargaville Hospital is just the tip of the iceberg. How did NZ's hospitals get to this point? 1News’ Anna Murray

* Scoop: Government wants ‘line by line’ review of council spending and floats asset sales NZ Herald-$$$’s Thomas Coughlan

The Kākā’s Journal of Record for August 1

Here’s the top six announcements, reports, news conferences, statistics & surveys in the last day to 9:00 am on Thursday, August 1:

* Climate & Housing: Local Government NZ released a report it commissioned from NZIER that found Government policies imposed unfunded costs on councils mounting to at least tens of millions of dollars each year. The report shows councils absorbed the cost of reforms by reducing service delivery and increasing rates. News: RNZ, The Post

* Economy: ANZ’s business confidence survey found a rebound from a low base in July, although employment is down compared to last July in every sector measured.

* Housing: Stats NZ's latest data finds that home building consents are down 24% this year, to levels last seen five years ago. Home consents in Wellington fell 69%, driven by a decrease in apartments. News: RNZ, NZ Herald, Interest

* Costs of living: Electric Kiwi launched a virtual mobile phone service based on 2Degrees that it said addressed the problem of wasted data worth $400 million a year. The Kiwi Mobile service allows customers to only pay for data they use.

* Housing: CoreLogic reported housing values fell in July for the fifth month in a row, with the median value now $827,515. CoreLogic’s Kelvin Davidson said a pipeline of new townhouses in Auckland will "keep a lid on" its property values.

* People moves: Wellington City Council's chief executive Barbara McKerrow announced she will finish her five-year term on 1 March 2025. News: The Post

And finally, some fun things

Cartoon of the day: Low jumper

Timeline-cleansing nature pic

A rarity chowing down

Mā te wa

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy today are:

* Decades of underfunding, a botched organisational reform, massive emigration of skilled staff to Australia, Covid and the usual winter flu cases have morphed into a systemic crisis in the health system, which is overwhelming a new Government still thinking too much is spent on health and not enough given back in tax cuts;

* Our economy is a housing market with bits tacked on and now our political economy is too, with property business owners and building materials firms dominating donations to the coalition parties against capital gains taxes;

* In solutions news, South Auckland’s politicians are rightly calling for some urban regeneration help from Eke Panuku after its population doubled since the creation of the ‘Super City’;

* In my chart of the day, more than $2.5 million in donations to National, ACT and NZ First from property businesses and a building materials magnate dominated the explosion in political donation declarations in the last couple of years;

* In my quote of the day, local pharmacists report customers picking up their prescriptions for free from Chemist Warehouse since the July 1 reintroduction of the $5 fee to pick up prescriptions, and then coming to them for advice; and,

* In my climate graphic of the day, a massive heatwave is set to sweep over Antarctica in the next week.

(Full paying subscribers can see and hear more detail, analysis and commentary in my podcast above and below the paywall fold. They also have access to my full daily Pick ‘n’ Mix of links elsewhere and The Kākā’s daily Journal of Record below. If we get more than 100 likes, we open these articles up for full public access and sharing online. Join our community of paying subscribers to also be able to comment and get access to our ‘Hoon’ webinars. Update: achievement unlocked!)

Top Six Things to note on Tuesday, July 30:

1. Systemic health crisis breaking all over the Government

It’s been a tough winter for everyone in the economy and for the Government, but it’s the wider health system where the pressure is increasingly intense. In some parts, the system is breaking down and the political fallout is raining down on the Government. That’s thanks to decades of under-funding relative to an ageing and fast-growing population and health costs growing faster than other costs worldwide. The previous Labour Government’s massive restructure of DHBs and staff losses to Australia over the last 18 months have been the final straws.

Just watch last night’s post-Cabinet news conference from 10 minutes onwards in this video to get a sense of the intensity of the pressure and the way a system of hospital, GP and specialist staffing shortages along with ageing facilities is cascading into a series of crises.

Both National and Labour have fought for decades to contain health spending to ensure the size of Government has stayed at or below 30%, which has pushed the system close to the brink. Covid and the Government’s latest cuts in per-capita and real terms have combined with the creation of Te Whatu Ora-Health NZ into a perfect storm.

Just in the last 48 hours, here’s a sample of the signs of crisis and collapse, dominated by yesterday’s scoop from RNZ’s Ruth Hill that from Dargaville Hospital that patients turning up to A&E at night were having to use telehealth because there were no doctors. But it’s just one symptom of the stress. Others include:

* 80% of GPs closed their books to new patients at some point in 2019-22: Vic Uni’s Jackie Cumming via The Conversation

* Community pharmacists afraid for future of business and patient care RNZ’s Louise Ternouth

* The effects of doctor shortages through the eyes of practitioners and patients RNZ Checkpoint

* Man not told of suspected cancer for four months RNZ

* Patients travelling hours amid doctor shortage, mayor says RNZ

* GP shortage at critical level and fees are set to rise NZ Herald’s Wynsley Wrigley

2: First it was our economy. Now it’s our politics.

Donations to parties against taxing capital gains dominate politics now

I’ve half-joked for years that Aotearoa’s economy has become a housing market-with-bits-tacked on for an economy. Now it’s clear that economic domination has translated into a domination of funding for our political parties, and especially for those three coalition parties opposed to taxing capital gains on property.

This deep dive analysis by RNZ’s Farah Hancock yesterday titled: ‘Why New Zealand political donations have more than tripled’ makes for essential and startling reading. The chart of the day below tells the overall story.

The property-owning and building materials industry dominate in the last three years of donations, with property business owners and a family-owned windows business responsible for more than $2.5 million in donations to National, ACT and NZ First on their own. This chart tells that story in particular.

Meanwhile, the the housing crisis thunders on and into the rest of the economy and society, as these news items about the fallout into the Army and hotel sectors today show:

* Call for independent review into Defence Force housing RNZ

* Campaign launched as images show 'horrendous' state of NZDF housing. A military advocate has described the living conditions in Defence Force homes as a "national disgrace", launching a campaign calling on the Government to respond. 1News

* People being kept in prison for lack of safe addresses to be bailed to RNZ’s Soumya Bhamidipati

* Queenstown tourism operators 'buy hotels to house workers' as housing crisis hits hard, with homeless list rising over 1,300 NZ Herald

3. Solutions News: ‘Let’s urbanise South Auckland’

Torika Tokalau from Local Democracy Reporting has a great piece this morning via 1News on Manurewa-Papakura ward councillor Angela Dalton’s call for South Auckland sites to be included in Eke Panuku’s Urban Regeneration Future Programme.

"Be prepared to pitch," Dalton told the Papakura Local Board.

"One of the driving criteria is that there is council-owned or central-owned land available so they can sell it and reinvest. Papakura doesn't have much land. Manurewa does, it has more council-owned assets than it can probably leverage off."

"Papakura, in the Unitary Plan, is a metropolitan centre and I think it deserves to have some sort of attention into how it can get to that stage."

She said Papakura's population had nearly doubled since the Super City, and the local board needed to start thinking of how it would care for them and what its town centre would look like.

Second that.

4. Chart of the day

Land owners just bought our democracy

5. Quote of the day

Patients pick up pills from Chemist Warehouse, but ask for help from local pharmacists

"They feel embarrassed they ask us, and they say, 'I'm so sorry I didn't come to you because, you know, it's free there but the pharmacist was too busy to explain anything to me, ' or 'I asked the shopper staff, but they had no clue'." Owner of Liddells Pharmacy in Pukekohe Bahareh Javadian via RNZ’s Louise Ternouth

6. Climate chart/graphic/pic of the day

The heatwave spreading over Antarctica this week

The best of the rest

Links to news and opinion elsewhere

Here’s my Pick ‘n’ Mix for Tuesday, July 30 of the top six news, analysis, deep-dive and opinion links elsewhere:

* News: Growing mistrust in law enforcement amidst long police wait times in Northland NZ Herald’s Avneesh Vincent

* Deep Dive: How the Interislander ferry business could be removed from KiwiRail NZ Herald’s Georgina Campbell

* Scoop: Police investigations into family harm drop, Minister briefed ‘threat to life’ possible NZ Herald’s Sophie Trigger

* Deep Dive Flood protection planned for Wairoa decades ago never got off ground. Hawke’s Bay Regional Council said stopbank proposal never progressed because the community couldn’t afford it. Stuff’s Marty Sharpe

* Op-Ed in Stuff by Nelson immigration law associate Elly Fleming: ‘Right when a myriad of complex changes to the Accredited Employer Work Visa Scheme are being rolled out, Immigration NZ systems have been failing.’

* Deep Dive: Revealed: the impact of New Zealand’s changes to policies affecting Māori. Guardian analysis of changes in six key policy areas explains the coalition’s rationale for the shifts and provides expert views on how they will impact Māori Eva Corlett and Jamie Tahana

Our Journal of Record for Tuesday, July 30

These are the top six announcements, reports, news conferences, statistics & surveys in the last day to 9:00 am on July 30:

* Economy: Stats NZ reported filled jobs fell 0.1% or 1,766 to 2.38 million in June from May, with the previous two months figures revised lower from being flat or up to being down. Jobs fell the most in June in Wellington (1,430) and rose the most in Canterbury (2,410), while filled jobs for workers under 30 fell 30,517 over the last year and filled jobs for those aged 30 to 40 rose by 25,236. Notes and reports on the data: Westpac, BNZ

* Climate: US insurance ratings service AM Best reported US insurers suffered US$15.2 billion underwriting losses in 2023, more than double the losses seen in in 2022 and the worst this century (US$14.8 billion wass the next worst in 2011). Notes and news reports on the data: Artemis, FT-$$$,

* Housing: The Public Health Communication Centre urged the Government to retain new Building Code insulation standards introduced in 2023, saying that MBIE advice finds buildings under the 2023 Code will need 40% less heating than older homes. Building Minister Chris Penk asked MBIE to work towards rolling the standards back. Notes and news reports on the research: RNZ

* Climate: After years of calls for him to go, Hawke's Bay's Civil Defence group controller Ian Macdonald has resigned, Hawkes Bay Regional Council CEO Nic Peet said via RNZ

* Housing: New campaign group Mission Homefront called for NZ Defence Force soldiers and their families to share stories about inadequate housing, pay, and working conditions. Leader Erin Speedy described family members suffering recurring illnesses because their NZDF-supplied homes were mouldy. News and reports: RNZ, 1News

* Poverty: Financial Services Complaints, a Financial Ombudsman service, announced a record number of complaints in the past year, with most over personal loans. News and reports: Stuff, NZ Herald

And finally, some fun things

Cartoon of the day

Timeline-cleansing nature pic

Mā te wa

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: Here’s the top six news items of note in climate news for Aotearoa-NZ this week, and a discussion above between Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer:

* A draft report from a UN taskforce on the use of carbon offsets was leaked this week, revealing the UN plans to reject companies’ use of carbon credits from the voluntary market, following a seemingly endless run of reports detailing serious integrity issues. Outrage from fossil fuel company representatives, quoted by the Financial Times, is already brewing in anticipation of the announcement.

* Rumblings about the current New Zealand Government’s offsetting plans are continuing to grow, following the release of last week’s Emissions Reduction Plan (ERP). Dame Anne Salmond lashed the proposed ‘tree planting frenzy’ in Newsroom, while the President of the New Zealand Institute of Forestry said it was good, but the Government had got the modelling wrong. In an RNZ interview, James Treadwell pointed out that the industry was only set to plant about half of the Government’s afforestation forecast over the next two years, leaving a big hole in the plan.

* The market’s next ‘black swan’ could come from climate risk gouging more than 40% from global equity valuations creating a ‘lost generation’ in equity returns.

* Fonterra is accused of spending more on advertising than research in a new global study looking at how big meat and dairy “delay, distract, and derail action on transforming the food system” mirroring strategies used by tobacco and fossil fuel industries.

* The social inequities of New Zealand’s transport emissions are unveiled in a new report showing some groups are ‘privileged’ by the current transport system, while it disproportionately harms the environment and other peoples’ health.

* Global temperatures hit fresh record highs in the last week.

(See more detail and analysis below, and in the video and podcast above. Cathrine Dyer’s journalism on climate and the environment is available free to all paying and non-paying subscribers to The Kākā and the public. It is made possible by subscribers signing up to the paid tier to ensure this sort of public interest journalism is fully available in public to read, listen to and share. Cathrine wrote the wrap. Bernard edited it. Lynn copy-edited and illustrated it.)

1. Integrity issues of the vast carbon trading market

A UN task force is rejecting the use of carbon credits by companies to off-set their greenhouse gas emissions, outside of government regulated markets, according to a draft report leaked to the Financial Times.

The task force, established by UN Secretary-General Antonio Guterres, says companies should focus on reducing their own emissions rather than participating in vast and growing voluntary carbon trading markets.

Many industries, including carbon intensive industries, rely on carbon off-setting to meet their net-zero carbon targets, claiming that it provides a critical stream of climate financing. This includes highly polluting fossil fuel companies, as well as tech companies like Microsoft, Amazon and Apple.

The Financial Times article quotes an outraged Jeff Swartz, vice-president at BP’s trading and shipping arm, which buys and sells carbon credits, “I would hope and I would expect that serious organisations that are committed to protecting ecosystems . . . don’t shut down an avenue for channelling that carbon finance.”

However, in recent years, report after report has emerged detailing serious integrity issues with carbon off-setting. Criticisms include vast over-statements of the emissions reductions achieved, the use of poor verification methodologies, impermanence of emissions reductions, and failure to obtain free, prior and informed consent (FPIC) from indigenous and other local communities.

While the bulk of these criticisms have applied to voluntary markets, government sanctioned schemes including the UN’s own clean development mechanism (CDM) and joint implementation (JI) that operated under the Kyoto Protocol, have also come under fire.

2. Growing scrutiny of NZ’s tree planting plan

Successive governments in Aotearoa have heartily endorsed carbon trading, both as a domestic policy tool for achieving emissions reductions, and as an international mechanism allowing the country to achieve its climate obligations through international off-setting.

Both approaches are coming under increasing scrutiny as challenges emerge. This week, Dame Anne Salmond issued a stern condemnation of plans by Minister for Climate Change, Simon Watts to promote “a tree-planting frenzy”, claiming that the strategy has proved to be an unmitigated disaster in the past:

After Cyclone Bola hit Tairāwhiti in the late 1980s, the government decided pine plantations were the answer to widespread erosion. Farmland was sold to international investors and converted to pine trees, hollowing out rural communities. 

While the profits flowed offshore, the costs stayed with ratepayers and taxpayers, in the provision of port infrastructure, the losses associated with workers killed and injured in the forests, and damage to the regional roading network.

When the trees began to be harvested, some of the most erodible landscapes in the world were left bare, with predictable outcomes.

In a series of severe weather events, culminating in Cyclone Gabrielle last year, sediment and forestry waste (including trees that toppled in the storms) swept down local rivers, destroying bridges, roads, fences, powerlines, farm buildings, paddocks, orchards, vineyards, crops and family homes. 

Riverbeds rose, increasing the flood risk to rural communities and Gisborne city. A little boy was killed by a pine log on Waikanae beach.

Agriculture, horticulture, viticulture, tourism, education, health and service industries in Tairāwhiti all suffered severe damage, and even the forestry companies themselves, many of which have been successfully prosecuted in the courts.  Source: Newsroom

Criticism of the country’s forestry strategy in a report on land-use change issued in May by Parliamentary Commissioner for the Environment Simon Upton has bounced around in international media, reported by Bloomberg News and turning up in PhysOrg.  Upton has long been critical of the use of afforestation as a cheap way to offset fossil emissions, suggesting they should only be used to offset short-term gases such as methane.

In addition, it emerged last week that the forecast tree planting in the Governments modelling for the draft Emissions Reduction Plan (ERP) overestimates by a factor of two the planting that is likely to occur in 2024 and 2025. New Zealand Institute of Forestry President, James Treadwell says that the government’s numbers are wrong and the projections unrealistic in an interview with Ingrid Hipkiss on RNZ, leaving a big hole in the ERP.

3. Beware the next black swan

In other news, a new study from the EDHEC- Risk Climate Impact Institute shows that failure to address climate change could gouge 40% from global equity valuations in what Bloomberg News describes as “the market’s next black swan”. According to lead author Riccardo Rebonato,

“After Covid we had a massive GDP loss but then a rebound. Here it seems to be like a headwind, a continuous headwind, without a rebound,” Rebonato said. “It could be the Climate Lost Generation in equity returns.”

The EDHEC paper forecasts much bigger stock-market losses than most other studies do, Rebonato noted. That’s partly because those other studies focused on the costs of transitioning the global economy to renewable energy rather than the far greater havoc climate change will inflict on growth.

[...] Weather disasters cost the global economy $1.5 trillion in the 2010s, according to the World Meteorological Organization, up nearly tenfold from the 1970s after adjusting for inflation. The reinsurer Swiss Re has suggested insured losses from natural catastrophes will double in the next decade.

But such numbers drastically understate the potential effects of climate change on economic growth. As Rebonato notes, extreme heat, sea-level rise and other long-lasting impacts of global warming will do much more damage to human health and productivity than individual disasters like hurricanes or wildfires.

“Perhaps we are focusing too much on catastrophic events rather than on chronic damages,” Rebonato said. “There is a chronic aspect in terms of the loss of productivity, the loss of efficiency, which is less visible and more insidious and will create a continuous drag.”

Hence the Lost Generation.

The EDHEC study is another reminder that the $215 trillion (and rising) estimated price tag to avoid the worst global heating will eventually pale in comparison to the cost of not bothering. And as big and fuzzy as these estimates may seem, Rebonato considers them conservative. Bloomberg

4. Big meat and dairy spend up to ‘delay, distract, derail’

Another international study out this week looks at the tactics used by big meat and dairy companies to avoid climate action.

The report from the Changing Markets Foundation claims that the  companies’ efforts to “delay, distract, and derail action on transforming the food system” mirror strategies used by tobacco and fossil fuel industries.

One of the 22 companies investigated in the report is New Zealand’s Fonterra, accused of spending more on advertising than it does on research.

This investigation shows that companies spend much more money on advertising than they do on low-carbon solutions. Despite featuring techno-fixes in their PR and marketing materials, our research shows that they spend on average 1% of their revenues on research and development. The actual amount that goes into low-carbon solutions is probably only a small fraction of this, as most companies do not break down where their R&D spending is going.

Three companies – Fonterra, Nestlé, and Arla – all spend more on advertising than they do on research and development across their business.  Source: The New Merchants of Doubt: How Big Meat and Dairy Avoid Climate Action.

A recent article in the journal Nature details how 80% of European agricultural subsidies support emissions intensive animal agriculture, pointing out that “[t]he same animal-based foods are associated with 84% of embodied greenhouse gas emissions of EU food production while supplying 35% of EU calories and 65% of proteins.”

Previous research has shown similar patterns in global agricultural support “that channels heavily towards emissions-intensive food commodities, which harms planetary health and hinders the production and consumption of lower-impact foods such as fruits, vegetables and nuts”, according to the article.

5. The winners and losers of transport emissions

And finally, another report from Otago University’s Public Health Communication Centre Aotearoa, this time they are examining the social inequities linked to transport emissions.

In a recently published study, they found that the most affluent households produce a tonne more emissions from travel annually than those in the most deprived areas.

The top 20% of people were responsible for around 55% of weekly transport emissions, while the bottom 60% of people were responsible for only 20%. They conclude that“[c]learly, some groups are ‘privileged’ by the current transport system, since they drive and fly more, meaning they disproportionately harm the environment and other people’s health (e.g. through air pollution emissions)”. At the same time “low-income households spend proportionately far more of their income on transport (16% in 2016) compared to high-income households (9% in 2016).” They make several policy recommendations for moving toward both a more fair and lower emissions transport system, including demand management of the most inequitable mode of transport, flying.

6. The planet keeps breaking records

Too hot, hot, hot…

For too long, long, long…

Ka kite ano

Bernard and Cathrine

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The podcast above of the weekly ‘hoon’ webinar for paying subscribers last night features co-hosts Bernard Hickey and Peter Bale talking about the Royal Commission Inquiry into Abuse in Care report released this week, and with:

* The Kākā’s climate correspondent Cathrine Dyer on a UN push to not recognise carbon offset markets and the rapid crumble of the Thwaites Glacier;

* University of Otago Foreign Relations Professor Robert Patman on the likely Democratic candidacy of Kamala Harris for US President and any implications for US foreign policy on Gaza, Ukraine, NATO and AUKUS;

* Special guest Green Transport spokeswoman Julie Anne Genter on Transport Minister Simeon Brown’s ‘Northern Expressway’ and speed limit increases in towns, around schools and on expressways, and Brown’s re-announcement of Labour’s plan for 18 new diesel-electric locomotives for Wairarapa and the Kapiti Coast, albeit less than National’s promise for 22 ‘tri-mode’ electric locomotives.

The Hoon’s podcast version above was recorded last night during a live webinar for over 120 paying subscribers and was produced by Simon Josey.

(This is a sampler for all free subscribers. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full.)

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy today are:

* Transport and Energy Minister Simeon Brown is accelerating plans to spend at least $10 billion through Public Private Partnerships (PPPs) to extend State Highway One as a four-lane ‘Expressway’ from Warkworth to Whangarei by 2038, but he hasn’t included climate emissions costs in the plan or worked out the per-vehicle or per-kilometre cost for only lightly-used roads, which would be at least twice as much as Transmission Gully and three times the cost on some sections;

* PM Christopher Luxon and Health Minister Shane Reti blamed a blowout in head-office and back-office costs in recent months at Te Whatu Ora-Health NZ to justify sacking its board on Monday and appointing Lester Levy as Commissioner, but Te Whatu Ora’s March quarter performance report (page 47) published this month specified higher-than-expected nursing hours, extra Holidays Act leave entitlements and higher pay equity and collective agreement pay increases for an extra $500 million in costs;

* NewstalkZB host Mike Hosking turned on Luxon in a combative interview yesterday about the health cost increases, accusing Luxon of being too slow to recognise and deal with the problem, which Luxon responded to by saying: “Come on. Come on. Give me a break.”

* In solutions news, the Commerce Commission proposed regulating and capping card payment charges in a way it estimated could save consumers and businesses $250 million a year;

* In the Quote of the day on the eve of the historic release of the Abuse in Care Royal Commission report, Dr Rawiri Waretini-Karena describes via RNZ going through a “pipeline sweeping up and funnelling Māori children from state care to prison,”; and,

* In our climate news graphics of the day, the European Union’s Copernicus climate data service reported overnight the global average temperature hit an all-time record high of 17.09°C on Sunday, July 21, beating the previous record of 17.08°C set on July 6,last year, and meaning average temperatures in each of the last 12 months have been at least 1.5 °C above pre-industrial levels.

(Full paying subscribers can see and hear more detail, analysis and commentary in my podcast above and below the paywall fold. They also get sent the full daily Pick ‘n’ Mix and Journal of Record emails. If we get more than 100 likes, we open these articles up for full public access and sharing online. Join our community of paying subscribers to also be able to comment and get access to our ‘Hoon’ webinars. Achievement unlocked!)

Top Six Things to note on July 16:

1. A highway twice as expensive as Transmission Gully

Brown kicks off $10b++ plan for PPP to build ‘Expressway’ to Whangarei

Without assessing the climate emissions costs or analysing the costs per km or per vehicle of 100 kms of new tarmac, Transport and Energy Minister Simeon Brown is forging ahead with a Transmission Gully-style PPP process to extend the four-lanes SH 1 all the way from Warkworth to Whangarei.

Brown announced the acceleration of the ‘Northland Expressway’ plan yesterday without stating the financial costs or giving any indication of the cost-benefit-analysis for the plan, let alone any suggestion he had considered the climate emissions implications. The words ‘climate’ or ‘emissions’ were not included in his announcement, or in the PDF of the Request For Proposal (RFP) issued by Waka Kotahi-NZTA through GETS and attached here.

NZTA described the project in the following terms in the RFP, including the map and timetable reproduced below:

NZTA is considering alternative ways to deliver a resilient highway from Warkworth to Whangārei (the Northland Corridor) that incorporates innovative procurement and alternative funding and financing approaches. Limited alternative connections between Northland and Auckland means the Northland Corridor must be resilient to minimise transport network vulnerabilities and support growth and development throughout the region.

As Northland’s economy is heavily supported by manufacturing, agriculture, and tourism, safe and efficient connectivity to Auckland is critical to connecting areas of production to key domestic and international markets.

This critical link currently lacks resilience (particularly at Dome Valley and the Brynderwyn Hills), has disproportionately high incidence of death and serious injury, and performs poorly against connectivity, congestion, and freight metrics. Significant investment is required to reduce risk of harm and death, improve corridor reliability, support both regional and national economic growth, and respond to the Government’s strategic priorities set out in the draft Government Policy Statement on Land Transport (GPS).

Over $10 billion of investment is proposed to upgrade the Northland Corridor to address these issues. Additionally, the New Zealand Transport Agency Waka Kotahi (NZTA) must also deliver a significant proportion of the $33.8 billion of roading investment in the New Zealand infrastructure pipeline within a labour and supply constrained market. Traditional approaches have had limited success in addressing funding and market challenges. NZTA RFP

But what would the true cost be?

Dileepa Fonseka did a great job this morning via BusinessDesk-$$$’s of delving into the potential true costs with Greater Auckland commentator Matt Lowrie, who noted a PPP prevented a future government from backing out of the project because it effectively locked spending up with a commercial contract.

Lowrie was also concerned about potential changes to the Public Works Act that might accompany the project.

“For local communities, particularly those who are either on or near the route … it suggests they’re going to try and take property without having to pay, or pay less.”

Lowrie said this cost was out of proportion to Northland’s population and not justified by the amount of traffic on the road, which he put at approximately 10,000 vehicles per day. However, he did accept the quality of roading infrastructure in Northland was poor.

“The question is, what would we be better to spend money on? $10b on a road to Northland or $10b on roads all throughout Northland that would improve all of them: improve safety, more passing lanes, easing corners, safety barriers, all those sorts of things.

“Spending that money on a wide range of projects would be a far better outcome for New Zealand and for Northland than one gold-plated highway.”

Lowrie pointed to cost estimates that emerged during the election campaign. These showed the Warkworth to Te Hana section alone could cost $4b to build and at approximately 26 kilometres, this would mean a build cost of $153.8 million per kilometre.

This was well above the per-kilometre cost of some other high-profile roads. Transmission Gully, for example, had an estimated $1.25b construction cost for 27km - approximately $46m per kilometre.

“The problem with this has always been the volume of traffic is very low, because Northland has a relatively low population, there’s not that much demand to justify a big four-lane expressway,” Lowrie said.

2. Health NZ’s cost surge not from head or back offices

PM Christopher Luxon and Health Minister Shane Reti baldly accused Health NZ and the previous Labour Government on Monday of presiding over wasteful cost blowouts in the new organisation’s back offices and head offices when justifying the appointment of Lester Levy as Commissioner to replace the board.

Levy also came out swinging yesterday in a news conference, describing Health NZ as ‘bloated’ and challenging criticisms by nurses, doctors and specialists that the sector was straining under the effects of decades of under-funding in real and per-capita terms. He said the health system had an abundance problem, not a funding shortage.

“Right at the moment, we don’t need more money, we just need to spend the money that we've got more wisely. And, you know, if I was the government myself, I would want to see evidence that we're getting value from the money that's been invested.

“But we have got a lot of resource. I know the scarcity and narrative of doom argument comes up a lot in healthcare. We’ve got in excess of $28b in revenue, we've got more than $25b of assets, we’ve got nearly 90,000 people.

“That sounds like, potentially, if you turn things around, that sounds like that could be an abundance issue if you just used everything properly.” Lester Levy in a news conference yesterday.

Really? That’s not what Health NZ said in its report this month

Luxon and Reti were much more political in their criticisms, laying the blame at the foot of the previous Government’s integration of DHBs into Health NZ, which Levy is now planning to devolve back out to four regional organisations.

But Health NZ has been very clear in recent months that the increase in costs above its budgeted levels of around $130 million a month was actually because of Holidays Act leave entitlements, new collective agreements with staff, pay equity increases and extra nursing costs because of extra hours being worked in jam-packed hospitals.

Either the minister or the PM wasn’t reading the reports, or they are misrepresenting the situation.

For example, Health NZ said in its March quarter report published on its website earlier in July (page 47) that it was having to use up its $409 million in year-to-date merger savings to pay for the staffing cost overruns early in 2024:

In March, nursing FTEs were greater than budget by 2,079 in the month and 878 year-to-date. Unbudgeted Care Capacity and Demand Management (CCDM) costs resulting in payment of higher-than-budgeted ordinary hours for nursing are the largest risk to achieving the desired surplus.

In addition, settlement of collective agreements above budgeted levels, unfunded impact of pay equity, and Holidays Act payments on leave revaluations, are also increasing pressure on the budgeted expenditure levels. Health NZ report.

Even then, Health NZ reported a surplus for the March quarter of $299 million, which was $300 better than budgeted, largely because primary health care spending and Covid 19 spending was less than expected. It also noted that capital expenditure was $892 million less than budgeted for and it expected full-year operational expenditure savings of $540 million.

Health NZ reinforced the spending increases were at the front line, rather than back offices or head offices, later in the report:

Over the last three months adverse financial performance has occurred, driven materially by an increase in ordinary nursing hours paid and an increase in leave revaluation costs above budget (driven by Holidays Act 2003 remediation payments and pay equity settlements). The savings generated (the $540 million mentioned above) need to be applied to these cost overruns.

3. ‘Tell you what mate! You were too slow’

Aside from the source of the cost increases, Luxon was also challenged on when he knew about the cost increases and why he hadn’t acted earlier in a particularly feisty interview yesterday with NewstalkZB host Mike Hosking.

Here’s the exchange after Luxon said around the 2 minute mark that the first signs emerged in October (the bolding is mine):

Hosking: Why when you knew something was awry in October are we sitting here in July only acting on it now? 

Luxon: We got back into office obviously at the end of November. 

Hosking: Why didn’t you do it January 5? 

Luxon: We have had a series of escalations…

Hosking: A series of escalations at $130 million a month. January, February. March. April. May. June. One hundred and thirty times. You do the numbers. Why are you acting now? 

Luxon: We are acting because we are getting it done. And we’re putting in place a commissioner who’s going to have…

Hosking: But why weren’t you doing it in January? February? 

Luxon: We have.

Hosking: You haven’t

Luxon: We have been a bit late just before Christmas. In our first few weeks we put in a Crown observer. 

Hosking: What? To tell you what you already knew? It was buggered then. It’s buggered now.

Luxon: You have got to have a bit more detail before you make a big change like we are doing and putting a Commissioner in. That doesn’t happen often. When you do that, you want to make sure you’re doing it right. 

Hosking: Tell you what mate! If I arrived to run the country in October and somebody told me there was $130 million a month being lost, they would be sacked on the spot. 

Luxon: We started in early December. You know that. We have worked our way through. 

Hosking:  I’ll give you this year. You have had seven months this year to do something. You’re supposed to be fixing this place up. You’re too slow. 

Luxon:  Come on, come on, give me a break. We’re moving at great speed. We’re putting in place a commissioner who’s going to have the power to get things sorted. We’ve hired more nurses than we’ve ever had in the last six months.

4. Solutions news of the day

ComCom plans to regulate card fees down by $250 million

It’s been encouraging to see the Commerce Commission push back in recent months against the oligopolies that layer extra cost into Aotearoa’s economy. The morass inside our card payments system has been problematic for decades.

Here’s more detail in the full consultation paper and in this interview with Chair John Small:

'Really quite annoying' - Paywave surcharges come under fire RNZ Checkpoint

5. Quote of the day

A funnel to the prisons

“When I walked into the prison yard for the first time as a teenager, having never been there before - I already knew 80 percent of the men in there. We'd spent the last 11 years growing up together in state care.

“That's when I knew there was a pipeline to prison; a pipeline that has spent decades sweeping up and funnelling Māori children from state care to prison.” Dr Rawiri Waretini-Karena via RNZ

6. Climate chart/graphic/pic of the day

Too hot, hot, hot…

For too long, long, long…

The best of the rest

Also, my Pick ‘n’ Mix for July 23 of the top six news, analysis, deep-dive and opinion links elsewhere include:

* Deep Dive: Chipping away at the housing crisis, including my comments RNZ/Newsroom’s The Detail

* News: Government softens on asset sales, promising to go to voters first NZ Herald’s Thomas Coughlan

* Scoop: Visa delays cost cash-strapped Te Pūkenga tens of millions. More than 1000 international students were stopped from beginning their studies at the mega-polytechnic due to visa processing delays. 1News’ Maiki Sherman

* Scoop: Legal action against Government 'possible' as officials warn deaths may rise under speed limit plans NZ Herald’s Thomas Coughlan

* Deep Dive: Government agrees 'in principle' to $10b worth of Northland roading PPPs BusinessDesk-$$$’s Dileepa Fonseka

* Op-Ed by Vic Uni Criminology Professor Elizabeth Stanley in Newsroom: ‘The least we should expect from final abuse in care report’

The Journal of Record today

Also, The Kākā’s Journal of Record for July 24 included these top six items:

* Beehive: Transport Minister Simeon Brown announced plans to use PPPs to fund, build and run a four-lane expressway between Auckland and Whangārei as part of the Roads of National Significance programme. The RFP issued by Waka Kotahi-NZTA and attached below indicated a total cost of around $10 billion, starting next year and finishing by 2038. It included the map below.

* Poverty: The Public Health Communication Centre released a briefing warning of a spike in whooping cough among NZ infants, with cases over tripling between April and June.

* Costs of Living: The Commerce Commission announced a consultation on ways to reduce the cost of Visa and Mastercard payment fees to consumers and businesses, which it estimated in this briefing paper could be $250 million in excess of what they should be.

* Verbatim: Full news conference video with Health NZ chairman Dr Lester Levy and CEO Fepulea’i Margie Apa talking about this week’s appointment of Levy as a commissioner.

* Statistics: Stats NZ reported greenhouse gas emissions rose 0.5% in the year ending March 2024, although emissions from agriculture, forestry, and fishing fell 1.9%. Electricity emissions rose in the March quarter because more gas was burned by generators.

* Climate: The International Council on Clean Transportation reported all new aircraft built from around 2035 onwards would need to emit net zero CO2 throughout their lifespan to meet the International Civil Aviation Organization's goal of net-zero CO2 by 2050.

And finally, some fun things

Cartoon of the day

Prices to be paid

Timeline-cleansing nature pic

Kotare VAR

Mā te wa

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: I’m casting around for new ideas and ways of thinking about Aotearoa’s political economy to find a few solutions to our cascading and self-reinforcing housing, poverty and climate crises.

Associate Professor Steven Hail runs an online masters degree in the economics of sustainability at Torrens University in Australia and is organising a two-day seminar in Auckland Tāmaki Makaurau on the weekend of August 10-11, which I’m attending. Here’s the detail and his announcement via X.

I wanted to find out a bit more about the course and these ideas, which are very different to what I was taught in my economics classes and the way that most economists and financial boffins still talk about both the economy and way we interact with the planet.

Here’s the full interview above and there’s a text transcript, which you’re all welcome to read. Rather than give my view, it’s worth reading and listening for yourself, in part because I’m still in the exploration stage.

Enjoy! And I look forward to meeting any fellow attendees.

Cheers

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy today are:

* Decades of underinvestment at the same time as record-high population growth have stressed housing, water, education and health infrastructure to breaking points all over the motu, which the new Government’s spending freezes are exposing and worsening;

* School principals, hospital administrators, council water network operators, consenting officers are all now chasing their tails, having to cut back on spending just as an avalanche of long-delayed maintenance and replacements arrive to compound the issues;

* Yet the debates about Government spending, investment and taxation arrangements ignore the fundamental gaps and non-decisions that keep escalating these infrastructure deficits, which already estimated at over $100 billion and rising towards $200 billion;

* Our body politic still believes we can have small Government, low public debt, no taxation of capital gains and mostly universal public services at the same time as rapid and unacknowledged population growth;

* That combination cannot compute without both the rolling collapses of those public services and an exodus to Australia of the (young, working and renting) losers in this current settlement of our political economy; and,

* Political debates and election contests both locally and nationally that acknowledge and address the population, taxation, inequality and productivity elephants in the room are necessary to break the spells of magical thinking and collective ignorance that have created this now-unsustainable collection of crises around housing, climate and poverty.

(Full paying subscribers can see and hear more detail, analysis and commentary in my podcast above and below the paywall fold. They also get sent the full daily Pick ‘n’ Mix and Journal of Record emails. If we get more than 100 likes, we open these articles up for full public access and sharing online. Join our community of paying subscribers to also be able to comment and get access to our ‘Hoon’ webinars. Updated: Achievement unlocked! Open now for full public listening and sharing.)

Top Six Things to note today:

1. We’re chasing our tails in our polycrises of infrastructure

Onslow College and Greytown consenting closure the latest examples

Three deeply-reported features on our housing, poverty and climate crises reinforced to me over the weekend the cascading and self-reinforcing nature of our infrastructure and population deficits that demand we challenge the current assumptions about our size of Government, who pays for infrastructure and whether we tax capital gains on residential land.

This is the Must Read from today’s Pick’n’Mix that reinforces the point: ‘Father and son live in a tent in Mt Maunganui, and have done for four years, in a million dollar suburb. Because of their living situation, the boy cannot enrol in school.’ Stuff’s Annemarie Quill.

The detail is just awful and comes against a background of a local election over the weekend, which was all about local home owners rebelling against high population growth that means they have to pay for the infrastructure that would build the houses necessary for all the extra people.

Ice has never attended school and Moeau has been teaching him.

“I would like him to go to school, and be with people his own age, but for that we need a house. I don’t want Ice to go to school and have to tell people he lives in a tent.”

The pair have no hot water, and use public toilets near the park.

“How can I send him to school in a clean uniform when we don’t even have hot water to shower or wash clothes?”

“I connected a hose at one point to a public water tap, just so we could wash even though it was cold water but someone complained.”

He’d like Ice to be able to go to school soon so he will be ready for intermediate.

“He’s super brainy in reading, writing, mathematics. I’ve taught him lots of things, but he needs to be with other kids, and do sports, have a normal life.”

They have got used to the cold, he says.

“We have blankets. The worst is when the tent gets waterlogged - if that happens we have to sleep in the car until it dries out.”

In my view: Aside from the awfulness of the living situation and the clear way inequality is passed on and amplified because of a housing shortage, the implications for school access are devastating.

Jocelyn Mikaere, deputy secretary at the Ministry of Education said to enrol at a school, the parent must state the student’s usual place of residence.

“If a family has no fixed abode, consideration will be given to the family’s particular circumstances and the local Ministry team will work with the family, local schools and other government agencies as required to ensure the child has access to schooling.”

It’s schools as well as houses

This deep dive from The Post-$$$’s Luke Malpass is another version of the same story. ‘When Chris Hipkins visited Onslow College in 2019 he had good news. Five years later there are no classrooms, leaks and broken promises.’

Mouldy classrooms; leaky roofs; gaps in windows so big you can put your hand through; a roof built over a roof, a gymnasium that can’t be used, and visitor parking smack bang in the middle of the school. Blocks and classrooms identified for replacement since 2013 are still there.

Welcome to Wellington’s Onslow College. A growing school of 1400 students in an electorate with the highest proportion of high salary earners in the country, it is also crumbling and decrepit.

“When it rains and it's windy, I wake up at two in the morning, and I think to myself, ‘What the hell am I going to arrive to?’ says principal Sheena Millar.

“I better get to school before other people get to school, to make sure that I have got people in drying carpets, cleaning up...

“I’m sick to death of asking the question, should [the school] open? So actually, it becomes is an enormous part of what you're thinking about and what you're dealing with on a daily basis.”

“I think basically what has happened is we've had identification of buildings that are no longer fit for purpose that go back to 2013. We've been told that they're going to be demo-ed, we're going to get new buildings. So when you're told that, you don't spend money on them yourselves either,” she says.

“And what we have are stop-gap measures to try and keep buildings that have got Stachybotrys in them, have got leaking in them, have got issues that we can't fix in them.

“Kids have had year after year of being told they're going to get new buildings, families have been told they're going to get new buildings and they're just not here.”

Land costs too much, so just move the house and commute instead…

Then there’s this piece via RNZ’s Checkpoint about a 22-year old who chose to move a house from Lower Hutt to a cheaper section in Featherston and then commute back to Lower Hutt.

The once-rundown character cottage that used to sit in Lower Hutt is now in Featherston. He said he chose to relocate the cottage to Featherston due to being close to Lower Hutt.

"It just seemed right to be a little bit closer to the city where you know there's a lot of my work."

In my view: The irony of having to move a house off land in Lower Hutt to Featherston because of land costs and then justifying Featherston because it was ‘close’ to Lower Hutt shouldn’t be lost on anyone. Also that Wairarapa’s Council has just stopped new housing connections to the sewerage systems in Martinborough and Greytown because of a lack of capacity, but it’s still open in Featherston.

2. That sprawl works, until it doesn’t

A piece of news late last week may have slipped past a few people, but it’s important because it illustrates the current failure in infrastructure.

Wairarapa has just stopped allowing new builds in both Greytown and Martinborough, as reported here via 1News and LDR’s Emily Ireland.

Growth has ground to a halt in Greytown — with the council putting a stop on new wastewater connections because the treatment plant is at capacity. It means plans for a 200-lot development, which would have grown Greytown's population by 10-15%, would not go ahead until the matter is sorted.

The district's mayor says he has "no concerns" about the stop to connections and that it would "be a mistake to overreact" to the news.

"Quite clearly we do need to make sure we have infrastructure in place before growth," he said.

Consents and permits that have already been approved will be honoured, as would consents that are in the process of being approved, he said.

The council also put a halt on new wastewater connections in Martinborough last year, leaving just Featherston open to new urban growth.

Councils being ‘set up to fail’

LDR’s Emily Ireland also reports via The Post-$$$ on the impossibility of allowing very fast population growth that has to be funded by taxpapers, while central Government banks the GST and income taxes to reduce its own debts and reduce taxes centrally.

Wairarapa-based Labour MP and former Local Government Minister Kieran McAnulty said councils had two choices, “they either significantly increase rates or they don’t do the work”. Many choose the second option.

Local Government Minister Simeon Brown said the halt on new wastewater connections in Greytown “shows the importance of local councils investing for growth”.

But McAnulty said “the blame towards council is misplaced” and if rates continue to be the only source of funding for councils to invest in water infrastructure, the issue was only going to get worse.

My expectation is the council will work closely with those affected, including housing developers, to provide them with a clear timeframe for when wastewater capacity will be increased,” he said.

“While this is a matter for the council to address in the first instance, the coalition Government is addressing widespread constraints on housing growth related to water services capacity through Local Water Done Well.”

But McAnulty said “the blame towards council is misplaced” and if rates continue to be the only source of funding for councils to invest in water infrastructure, the issue was only going to get worse.

“Rates affordability is shaping up to be the biggest issue for households and the Government hasn’t done anything to improve it,” McAnulty said.

He said the coalition Government’s Local Water Done Well plan would only lead to more council-controlled organisations similar to Wellington Water being established, and it was clear this model “is not working for South Wairarapa”.

“This government is setting councils up to fail,” he said.

3. The undebated assumptions and elephants in the room

So how did we get here?

This is all about the undebated assumptions shared by both major parties about the size of Government relative to the rest of the economy, the size of public debt relative to the economy and to do it with the magical thinking that Aotearoa can continue to have the currently promised universally-available public services such as education and health, and a universal NZ Superannuation indexed to 66% of average wages.

Those assumptions are:

* The size of Government should always stay below or trend back to below 30% of GDP;

* The size of net public debt should also stay below or trend back to 30% of GDP;

* That it is realistic to continue to have universally available and publicly funded, schools, hospitals and roads, along with a universal benefit for over 65s at two-thirds of average wages;

* That all this can be down while continuing not to tax the main source of fast-growing household wealth, which are capital gains on residential land; and,

* That all the above is also sustainable with ongoing population growth of 1.5-2.0 per annum, even though the publicly forecast and most-used assumption for population growth by planners is less than half that.

4. The circle cannot be squared. The centre will not hold.

This oingoing attempt to triangulate the impossible has led the major parties down cul de sacs of magical thinking that include a variety of politically or economically impossible assumptions when believed all at once, such as:

* That ‘someone else’ or ‘something else’ can always pay for this infrastructure and these services;

* That councils and the Government can and will keep squeezing ‘efficiency gains’ out of existing staff and assets to deliver more services and keep the assets functional for longer without extra investment or spending, and that this can happen until the end of time;

* That the private sector in the form of banks, fund managers and ultimately individual consumers will provide the revenue and capital to grow and/or repair the existing assets through Public Private Partnerships, public asset sales, sale-and-lease-back arrangements that are somehow cheaper and more publicly accountable than assets and services paid for by Government and council borrowing and staff; and,

* That consumers will be happy to pay water charges, road tolls and congestion charges to fund repairs and growth, when they previously haven’t had to directly and believe they’ve already paid once-over for the assets.

The underlying political judgement behind this magical thinking is that the median voters that decide elections, who are overwhelmingly older, home-owning families in the leafier suburbs of our major cities, will not tolerate the taxes on capital gains and/or the higher mortgage rates implied by taxing those capital gains and/or using more Government borrowing to pay for the infrastructure.

The political framing of this magical thinking is always based on the ideas that:

* Public servants are lazy and wasteful;

* Councils are reckless and hopeless;

* Beneficiaries of the non-universal benefits don’t deserve those benefits and can live just fine without troubling anyone else or using public services more when they aren’t paid those benefits;

* Beneficiaries of the universal benefits do deserve them and they can never be changed;

* It is of course a good thing for the Government to have lower debt in order to allow households to have higher debt with lower interest rates, in order to buy and leverage more residential land for tax-free capital gains;

* No one will leave the country in despair if they don’t benefit from this political settlement because New Zealand is such a nice place filled with lovely people and will always have better living standards than elsewhere; and,

* There’s always more fat in the system to keep it resilient and able to handle shocks.

5. So how is that magical thinking working out?

Residents who rent and work are voting with their feet by leaving to live in Australia and elsewhere. Many have given up on voting or never started voting, believing there was no real alternative to the set of magical assumptions above. Remember that the Green Party committed to keep net debt below 20% of GDP and the size of Government below 30% of GDP before the 2017 election.

The news of the day is dominated by signs the infrastructure is stretched to breaking point and pieces of it are now breaking and cascading down in feedback loops to break other bits of the infrastructure. See today’s Pick ‘n’ Mix for at least 20 examples across housing, health, education, Police, Justice and social services to see the evidence.

6. So what can we do now?

We can challenge those assumptions above and decide what type of triangulation actually works in terms of:

* the size of government, size of Government debt;

* who pays to build and run public infrastructure and services;

* the nature of population growth and how we plan and build for that; and,

* the types of public services we agree we can sustainably have in the long run.

This should happen during an election. I’ll have a think about how The Kākā could contribute to these debates through assessing and proposing solutions that are coherent and realistic.

The best of the rest

Also, my Pick ‘n’ Mix for July 22 of the top six news, analysis, deep-dive and opinion links elsewhere include:

* Today’s Must Read: Father and son live in a tent, and have done for four years, in a million dollar suburb. Because of their living situation, the boy cannot enrol in school. Stuff’s Annemarie Quill.

* News: Why growth has ground to a halt in Wairarapa town 1News LDR’s Emily Ireland

* News: Land sat empty for 14 years, and not a ‘boutique retirement village’ in sight. Ryman Healthcare has now sold the prime Wellington land to a new owner.  Stuff’s Laura Frykberg

* Deep Dive: Mould, leaks and now back to the drawing board for Wellington school. When Chris Hipkins visited Onslow College in 2019 he had good news. Five years later there are no classrooms, leaks and broken promises.  The Post-$$$’s Luke Malpass

* Deep Dive: Big argument over a tiny house: Stand-off leaves couple homeless. A dramatic dawn visit with an angle-grinder was the latest step in an angry dispute between a couple and their landlord over their tiny house. Stuff’s Steve Kilgallon

* Solutions News: Talks underway for specialist GPs to diagnose and treat ADHD RNZ’s Luka Forman

The Journal of Record today

Also, The Kākā’s Journal of Record for July 22 included these top six items:

* US President Joe Biden announced via X this morning he would not stand for a second term.

* Multinational professional services firm GHD released research showing that one in five NZers spend over 50% of household income on mortgage or rent

* Simeon Brown announced the NZTA has begun work to replace nine state highway bridges with new increased-capacity structures.

* Winston Peters gave a speech at the Pacific Islands Forum Leaders Meeting to discuss NZ’s “foreign policy reset.”.

* The Health and Disability Commissioner released a report analysing five years of complaints it's received about residential disability support services.

* Meridian Energy announced that the Harapaki Wind Farm, able to power around 70,000 homes, was now fully operational.

And finally, some fun things

Cartoon of the day

A glitch in the machine

Timeline-cleansing nature pic

‘What? You don’t like me sandy? Don’t throw the stick in the sand then.’

Mā te wa

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR : Here’s the top six items climate news for Aotearoa this week, as selected by Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer. A discussion recorded yesterday is in the video above and the audio of that sent onto the podcast feed.

* The Government released its draft Emissions Reduction Plan (ERP), revealing Aotearoa is no longer on track to meet its third emissions reduction budget, and admitting that ‘more work will need to be done’. The  discussion document shows that while the Government’s plans will narrowly meet the second emissions reduction budget, the third ERP will be 17 Mt CO2-e short, while relying heavily on claimed offsets from exotic forestry, carbon capture technology and natural features such as wetlands.

* The Government claims to be adopting a ‘least-cost path’, net-based approach. That essentially means accepting higher for longer gross emissions from burning fossil fuels. These permanent emissions will be largely offset by cheap exotic plantations that will permanently lock up land, requiring future generations to maintain it, and replace any losses from wildfires, pests or weather events. The Climate Change Commission suggests this approach will make it harder to keep emissions down after 2050.

* Heavy reliance on the ETS flies in the face of evidence and advice from the Intergovernmental Panel on Climate Change (IPCC)’s 2023 mitigation report, which suggests that a mixed policy response is more effective.

* The proposed CCUS framework is based predominantly on gas field carbon capture, utilisation, and storage, a process that can deliver net positive emissions. Nevertheless, a full one third of the government’s emissions reductions from complementary actions outlined in the discussion document are ascribed to the new framework.

* The Government’s approach aligns with an international trend toward delaying gross emissions reductions, passing on a higher carbon debt to future generations who will be forced to invest trillions of dollars in technologies that may never scale sufficiently, while attempting to remove them from the atmosphere in the back-half of the century.

* Meantime, the planet is getting fatter and slower as ice melts at the poles.

(See more detail and analysis below. Cathrine Dyer’s journalism on climate and the environment is available free to all paying and non-paying subscribers to The Kākā and the public. It is made possible by subscribers signing up to the paid tier to ensure this sort of public interest journalism is fully available in public to read, listen to and share. Cathrine wrote the wrap. Bernard edited it. Lynn copy-edited and illustrated it.)

1. ‘Least cost’ risks ending up as ‘most expensive’

According to the Government’s newly released discussion document, the country is on track to meet its first emissions budget (2022-2025), based on reductions already banked (primarily the result of policy actions taken by the previous government).

The plan narrowly meets its second budget, with the aid of some new complementary policies and greater reliance on off-setting. The third budget (2031-2035) is missed by around 17 million tonnes of emissions, under current conditions.

RNZ’s Eloise Gibson provides an excellent summary of the draft plan here, pointing out that,

Relying on offsets - whether from trees, carbon capture technology or natural features such as wetlands - is a major feature of the government's draft climate plan.

The plan focuses on meeting targets in the lowest-cost way - meaning placing no major limits on planting pines trees to meet targets and encouraging technological solutions like storing carbon emissions in underground reservoirs, rather than cutting emissions at the source. Other natural solutions such as re-flooding drained peatlands are also being considered.

"This government is committed to a least-cost, net-based approach, which will maximise the emissions reduction value of every dollar we spend. It also acknowledges the role that offsets like forestry and other carbon removals play in bringing us closer to our emissions reduction targets," says the draft plan, which is now open for public consultation.

It should be noted that the ‘least-cost approach’ is not synonymous with the ‘best or most effective approach’. Even if cost is your sole consideration (which it shouldn’t be), the least-cost path today risks being the most-expensive path in the future.

The Government’s planned approach delays reducing gross emissions in the short-term, leaving a higher carbon debt for future generations. While higher emissions can be cheaply off set in the short-term, primarily by planting more exotic forests, these are impermanent solutions, whereas emissions caused by burning fossil fuels in transport and factories are as good as permanent.

It is also questionable to count afforestation this century as an offset for current emissions when it is really just offsetting deforestation from last century.

Further, as Gibson points out:

The Climate Change Commission has previously warned against relying too heavily on trees, because of the risk of carbon offsets driving planting on all the country's available land - while polluters fail to tackle the root causes of emissions, such as burning fossil fuels in vehicles and factories.

Relying on planting instead of focussing more on cutting emissions could make it hard to keep emissions down after 2050, the commission has warned, and planted land is tied up forever, unless the owner repays any carbon credits gained from growing the trees.

The discussion document itself acknowledges that carbon stored in trees can be lost to wildfire, pests, or weather events, leaving future generations to make up the difference, in addition to accounting for higher ongoing gross emissions.

2. Scooping up the low-hanging fruit in short term approach

The focus on market-led approaches, leaning heavily on the ETS, is not recommended by experts.

The most recent report from the IPCC’s Working Group III makes clear that a mixed-policy approach has proven most effective to date. 

By focusing on least-cost options, emissions trading schemes tend to scoop up ‘low hanging fruit’, in the form of emissions reduction approaches that are quick and easy to deliver.

This leaves harder-to-decarbonise processes and systems unaddressed. These are generally more expensive and take longer to deliver emissions reduction results but must nonetheless be addressed eventually, with ever more costly offsets required until they are.

The most effective and fair approach would begin to address some of these long-term processes early, spreading the costs over time and ensuring the reductions are achieved in a timely way. A market-based approach won’t achieve that on its own.

3. A destructive cycle of dependence

Looking at the transport sector alone, the delay that has been introduced in the transition toward electrification means that the country will continue to have a deeper reliance on imported refined oil.

Aotearoa-New Zealand’s largest commodity group import is fossil fuels (mostly refined petroleum), representing 14.4% of imports in 2023, while its largest export category is dairy produce (28% of exports in 2023).

The more dependent we continue to be on imported fossil fuels, the more dependent we remain on exported dairy products (28% of exports) to pay for it.

That relationship reduces the country’s resilience to supply chain disruptions including geo-political conflict, maintains pressure to maximise outputs from the dairy sector, and embeds ongoing damage to biodiversity and freshwater supplies.

4. Carbon capture claims don’t stack up

This brings us to the Government’s newly announced plans for Carbon Capture, Utilisation and Storage (CCUS).

The modelling for the discussion plan suggests that the Government’s complementary strategies (outside of the ETS) will contribute 4.1 Mt CO2-e of emissions reductions toward the second ERP. A full third of this is attributed to CCUS, deployed predominantly at the country’s major gas fields.

This process involves capturing CO2 emissions related to the extraction of natural gas and reinjecting them into the gas field to help flush out more gas.

There are two important points to note here:

* Less than 10% of CO2 emissions from natural gas are related to its production. The strategy does nothing to address the bulk of emissions that occur when the gas is combusted and used by consumers.

* The net emissions from CCUS  can end up being slightly positive, in that the additional gas or oil extracted from the process causes more emissions than what is being stored.

* In the government’s discussion document, there is an additional assumption that the Maui East field is developed when it otherwise wouldn’t have been due to increased fossil fuel availability from the enhanced recovery options under a CCUS framework. This contributes to a slight net positive emissions result in the plan.

* Rather than contributing to emissions reductions, the introduction of the process increases profit potential for fossil fuel companies, while adding slightly to net emissions that the country will need to deal with, despite claims to the contrary made by Simeon Brown.

5. A debt that will have to be paid

Internationally, the trend toward delaying real emissions reductions to maintain a status quo that benefits a few, is increasing the risks of a grand existential failure.

A recent article from climate scientist Zeke Hausfather on the Climate Brink substack discusses the issue of an increasing future climate debt and the folly of relying too heavily on negative emissions technologies to control planetary warming.

We are passing down our carbon debt to future generations that will have to be paid if they ever want to recover the climate of the past that shaped both the natural world and the development of human civilization. And increasingly, we are normalizing this carbon debt in our models and mitigation strategies.

For example, nearly all integrated assessment models (IAMs) that limit warming to 1.5C or 2C by the end of the century exceed the remaining “carbon budget” by a large amount – around 600 GtCO2 – by relying on carbon dioxide removal (CDR) technologies to remove vast amounts of CO2 from the atmosphere later in the century. This CDR is used both to deal with some residual CO2 emissions that are deemed too difficult or expensive to mitigate, but also to deal with overshoot (particularly in 1.5C scenarios).

[…] But carbon debts turn out to be quite expensive to pay off. For every 0.1C we want to cool the climate after we get to zero emissions, we will have to pay around $22 trillion – assuming we are wildly successful and get the cost of permanent carbon removal down to $100 per ton.

This future carbon debt represents a huge burden that we will pass on to our children and future generations.

We assume that they will be richer and have better technology than current generations, but that is a sizeable assumption given the devastation to their natural resource base, costly climate impacts (from heat, storms, and rising sea levels) and the accompanying geo-political instability that we are also passing down to them.

To put it politely, the climate strategy that is being proposed fails the equity test in several ways, but an important one relates to the intergenerational transfer of debt and earth system damage.

6. Aren’t we all, planet Earth, aren’t we all ..

In other news, it appears that the melting of ice at the earth’s poles is making the planet fatter and slower – enough to make each day just a little bit longer according to new research published in the Proceedings of the National Academy of Sciences of the USA

The change in the length of the day is on the scale of milliseconds but this is enough to potentially disrupt internet traffic, financial transactions and GPS navigation, all of which rely on precise timekeeping.

The length of the Earth’s day has been steadily increasing over geological time due to the gravitational drag of the moon on the planet’s oceans and land. However, the melting of the Greenland and Antarctic ice sheets due to human-caused global heating has been redistributing water stored at high latitudes into the world’s oceans, leading to more water in the seas nearer the equator. This makes the Earth more oblate – or fatter – slowing the rotation of the planet and lengthening the day still further.

The planetary impact of humanity was also demonstrated recently by research that showed the redistribution of water had caused the Earth’s axis of rotation – the north and south poles – to move. Other work has revealed that humanity’s carbon emissions are shrinking the stratosphere.

Source: The Guardian

Ka kite ano

Bernard and Cathrine

PS: Here’s the full video of the news conference with Simon Watts we mentioned in our discussion in the video above. Thanks to RNZ.

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