A clean bill of wealth
Kiwis have an opportunity to sell themselves as cleantech consultants to the world.
Tuesday, February 07 2012 || Sustainable 60 || BY Steve Kilgallon, Sunday Star Times
In fact, only the pharmaceutical industry is bigger now than cleantech, worth $800b of new-spend in Europe this year alone. Whether you believe the earth is getting warmer matters not – cleantech (any product or service that's more efficient and reduces the environmental impact, but often referring to energy and fuels) is big business.
And cleantech advocates say New Zealand has the natural advantages to become a world leader: we already do renewable energy (79 per cent of electricity), meaning we are less tied to increasingly scarce fossil fuels, we export, we have free trade with China, no lack of water, lots of wind, an innovative mindset. And they argue that if we don't move quickly to exploit those advantages, the damage particularly to our lucrative clean, green brand will be ruinous.
This is no longer an argument about saving the planet, but cold hard cash. The environment lobby has realised the only way to persuade business to change tack is to debate the economics.
And those in business who have already seen the light – entrepreneurs like Stephen Tindall (the Warehouse), Rob Fyfe (Air New Zealand) and Phillip Mills (of gym group Les Mills) – are convinced we simply can't afford not to act. As Mills says, "Good business is about picking the sunrise, as opposed to the sunset... "
But of course, everyone else in the world also knows about cleantech, and the prevailing conditions (the lack of cheap, easy oil and coal, climate change, water and food scarcity) that make its adoption appealing. And so the Kiwi cleantech lobby says the time is now.
"We are about to miss out, and it scares the hell out of me," declares Simon Boxer, Greenpeace New Zealand's cleantech expert. "Because then we might as well dig the coal up, because there will be nothing left."
And yet the Sunday Star-Times has learnt that a forthcoming government report into green business is likely to take a disappointingly conservative tone and relegate cleantech's economic significance to behind agriculture, tourism and, most controversially, new oil and gas exploration.
As far back as 2007, former prime minister Helen Clark declared New Zealand's target was to become the world's first truly sustainable nation. New Zealand Trade and Enterprise (NZTE) cleantech investment manager Chris Mulcare – who writes an impassioned column in today's Focus – often quotes British climate change researcher Lord Nicholas Stern, who told him he "couldn't overstate" New Zealand's importance as an example, both positive and negative. Negative, in that if New Zealand cannot do it, who can? And positive, in that New Zealand could be a significant influence on other countries' behaviour. As even Boxer admits, we're so small that our carbon emissions won't save or condemn the planet. But if we're first, we can look good and make some money. "It is my belief that New Zealand only truly matters in the world when we lead," says Mulcare, "and when we lead, we win."
Our big opportunity was quite clearly spelled out in a report commissioned by NZTE and produced by consultants PricewaterhouseCoopers back in 2009. PWC said the cleantech economy was then worth $284b and forecast it would rise to $US1.3 trillion by 2017. And it suggested we target a tripled market share of up to 0.9 per cent, worth an extra $34b to our economy.
These numbers seem incredible, but Boxer, who talks enthusiastically of a world revolution where Japan is closing nuclear power stations en masse and Germany is shifting almost entirely into renewables, says the only thing you can predict about cleantech is that it exceeds expectations. "There is money sloshing around," says Boxer, citing huge contracts for geothermal work in Indonesia as an example; even 10 per cent of those would double our geothermal industry. "But if we don't act we will soon lose it forever. All we are lacking is the political will and framework."
The government's main response to the cleantech revolution has been the establishment, last January, of a "Green Growth Advisory Group", led by Business New Zealand chief executive Phil O'Reilly, to consider export opportunities, innovation and a prospective shift to cleantech. It delivered a report in December which isn't yet publicly available but the fear within cleantech lobby circles is that the report is not ground-breaking, sticking closely to the government's Economic Growth Agenda (EGA), which gives little attention to cleantech. The EGA instead establishes four areas – tourism, food, oil and gas and a catch-all category of manufacturing and services – to boost the economy by at least $101b before 2025 and match Australian wages; or to put it coarsely, suggests more milk, more punters, more black stuff. But they are yet to attach a likely value to new coal and oilfields. And can we truly encourage that many more tourists, eke that much more milk and dairy from our already efficiently farmed land, and dig enough holes?
Asked about the Green report, Duncan Stewart, executive officer of the business lobby group Pure Advantage and owner of green investment business The Greenhouse, says: "My expectations are high." Asked if he could be disappointed then, he adds: "I think there is a possibility I may be disappointed by it. But it is the start of a conversation."
The PWC report said a "cultural shift is needed to de-couple the link in New Zealanders' minds that equates economic prosperity with environmental degradation". Essentially, Kiwis need to be convinced that we could turn away the oil and gas prospectors and not lose out financially. Stewart talks about presenting options to New Zealand.
