As its prime minister preaches to the world, New Zealand begins grappling with the costs of climate piety.
At a Climate Week summit in New York, Jacinda Ardern exhorted other global leaders to adopt “robust and credible rules” to ensure success of the 2015 Paris Climate Agreement.
Countries can meet goals of that agreement—chief among them limiting Industrial Age warming of the planet to 2°C.—only, she said, “if we have clarity and confidence about each other’s commitments and action.”
Ardern later was to deliver her message at the United Nations, French President Emmanuel Macron’s Global Planet Summit, and the kickoff meeting of the Carbon Neutrality Coalition, of which New Zealand is a convener.
In her first year as prime minister, the affably liberal Ardern has achieved status coveted in the upper mists of international relations: climate leadership.
She did so by banning offshore oil and gas leasing in April (OGJ, Apr. 23, 2018, p. 27). The gesture will not affect the climate. But the sacrifice of a business is enough to win Ardern ordination as a Climate Leader.
Back at ground level, New Zealanders are worried about the economic consequences.
A new government estimate puts the net present value of government revenue lost to the offshore leasing ban during 2027-50 at $7.9-23.5 billion ($5.2-15.6 billion US).
That’s 3-8% of New Zealand’s annual gross domestic product.
Hardest hit will be the oil-and-gas-producing Taranaki region.
But oil and gas-especially gas—not produced in New Zealand will have to come from elsewhere—purchased, no doubt, at greater cost. That effect will be nationwide.
Businesses are responding. Greymouth Gas Turangi Ltd., a domestic onshore producer, challenged the licensing ban in a Sept. 27 lawsuit.
With her sermonizing, Ardern rehearses for a December United Nations meeting on the climate in Katowice, Poland. There, she’ll receive adulation sure to make New Zealanders proud.
In Taranaki now and the rest of New Zealand eventually, though, hard questions await about the price of her idealism.
(From the subscription area of www.ogj.com, posted Sept. 28, 2018; to comment, join the Commentary channel at www.ogj.com/oilandgascommunity)
