Pure Advantage's recipe for prosperity
Pure Advantage hopes to create significant debate about a cleantech future.
Thursday, November 03 2011 || Sustainable 60 || BY Mark Revington
It’s also hard to ignore New Zealand’s dismal economic slide over the past two decades, not to mention the growing gap between New Zealand’s 100% Pure brand and reality.
Philip Mills outlined Pure Advantage’s simple premise in the article Change Agents in Unlimited’s June/July edition last year. In the 20th century the world grew on the back of a carbon economy fuelled by cheap oil. The megatrend of the 21st century will be a low carbon economy. That signals an enormous economic and environmental opportunity for New Zealand.
Mills was joined by some of our most successful brand builders and businessmen last year to launch a lobby group that wants the country to pursue low carbon opportunities. They took it a step further this year by launching Pure Advantage to stimulate discussion around the opportunities. Pure Advantage has now been joined by more powerful figures like Sir Paul Callaghan, former Fairfax CEO Joan Withers and former General Motors CFO Chris Liddell.
The past is not an accurate guide to a successful future for New Zealand, says Morrison. “We can’t rely on doing things the way we have done in the past if we want to ensure New Zealand has a prosperous future.”
But the enormity of the task facing Pure Advantage was exemplified soon after its launch when the government released its energy policy, which focuses on more extraction of fossil fuels. Morrison described the policy as “based on the premise that we can have our cake and eat it too”.
New Zealand imports $6 billion of oil a year, providing around 60% of the country’s energy mix — and we are inefficient energy consumers, says Morrison. Instead of drilling offshore for oil, we should explore alternatives, he says.
“New Zealanders are proud of our farming industry but when our beef and lamb exports total $5 billion a year and we spend $6 billion a year importing oil, how smart is that?”
Much of the problem in getting Kiwis to understand or think differently has been the way the debate has been framed, says Morrison.
New Zealand’s slogan is 100% Pure. Not sort of, not maybe. If we are going to stick with the slogan, we better make damn sure we are 100% Pure, he says, or our exports could go down the gurgler.
Morrison, who recently added chairman of Kiwibank to his CV, took on the Pure Advantage role after retiring as chairman and CEO of Hong Kong-based CLSA Asia Pacific Markets, a brokerage, investment banking and private equity group. He was also a member of the Copenhagen Climate Council, put together by Australian Tim Flannery to align scientists, policy makers and businesspeople to find some sort of global concensus around climate change.
However, unified action on climate change is difficult because domestic politics always come into play, says Morrison. “The reality now is that gaining consensus between the senate, congress and the president in the United States is pretty remote. And if the US is not there then China won’t be there.”
That hasn’t stopped China setting tough targets around energy use in its five year plan, says Morrison. “What individual countries are doing is much more significant and the shift towards low carbon economy trends is being driven by energy requirements, pollution, overall environmental degradation and population concerns.”
Some Kiwis ask why we should set stricter environmental targets if other countries aren’t.
That would be logical if New Zealand wasn’t differentiating itself through the 100% Pure brand, says Morrison. And by looking after our environment and pursuing a low carbon economy, we invest in skills and IP that will be worth plenty in the global market, he says.
Pure Advantage hopes to push its case through reasoned economic debate and advertising campaigns. You may have seen their billboards around the countryside. The group will also lobby politicians and policy makers, says Morrison, because policy levers will often prompt an innovative response from business.
“California in the 1980s and 1990s had some of the toughest envirnmental legislation in the world. Now California has a 25% share of all private investment globally in cleantech. We really do need some clear political thinking around this. New Zealand at present doesn’t have any consistency in terms of strategic direction and it is remarkable how much we underestimate global opportunities.”
The transition to a low-carbon economy would certanly have some discernible opportunities for New Zealand.
The global response to the problems of climate change will of course entail a massive shift of industrial and financial resources.
To cut emissions of greenhouse gases (especially carbon dioxide), consumers, companies, industries, and even entire countries will have to abandon current forms of carbon-based consumption and switch to new, less-polluting alternatives, however, vast sums of capital will be required to fund emission-reducing projects and infrastructure.
But having said that, new industries will be forged, going far beyond the nascent companies we see today. New financial products and markets will be necessary to manage and transfer the risks and costs of carbon emissions. Increasingly forceful regulatory intervention will drive unprecedented shifts in cash flows and valuations. Investors and regulators will demand better information about the economic impact of climate change.
I see that this shift has already begun. And as cap-and-trade schemes and other regulations proliferate and more companies and industries come within their ambit, the need for financing and trading will grow enormously. Banks, investors, and exchanges have critical roles to play in shaping this transition to a low-carbon economy.
In recent months, many governments looking to stimulate their economies have identified low-carbon investment as a compelling source of jobs, growth, energy security, and emissions savings.
If the New Zealand Government wishes to protect what they refer to as New Zealand's 100% Pure brand, then besides 'Talking the Talk' they must 'Walk the Walk' as well.
As for their "energy policy which focuses on more extraction of fossil fuels." it clearly indicates that they speak with 'Forked Tongues' and makes a mockery of the New Zealand 100% Pure brand.
Posted by Siena at 07:24 on November 3, 2011
The 'low-carbon revolution' is purely imaginary. There is no evidence that fossil-fuel's share of global energy requirements will be any lower during the next 50 years than the last 50 years:
1. The US DOE announced today that this year's anthropogenic CO2 emissions are an all-time record.
2. There was no material progress at Copenhagen or Cancun, and no expectations of Durban.
3. The Kyoto commitment expires next year.
4. NZ is the only country to enact an ETS in the 7 years since the EU scheme - which has not reduced emissions.
5. USA, Canada, Japan and Korea have shelved their ETS plans. Australia will have a Coalition government before 1916.
6. Opinion polls everywhere (including Pew in 111 countries) show a steady erosion of public support for mandatory schemes/subsidies.
7. Peak oil is as far away as ever. Shale gas will dominate the next half-century.
Industrial policies, with Governments picking winners, inevitably result in expensive debacles. (See Sir Paul Callaghan's recent Herald article).
I know of no NZ exporters who use the 100% Pure brand.
Posted by Barry Brill at 07:32 on November 5, 2011
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