The economics of climate change

Let's not kiss global prosperity goodbye by ignoring climate change.

We face a dual storm of an economic recession and a climate crisis. The good news is, the solution to one lies in the solution to the other. The global financial crisis is a turning point: the opportunity now exists to create economic rebuilding policies that can create low-carbon economies and create green-collar jobs.

"The current economic situation is an opportunity masquerading as a crisis." - UK Economist and UK Government Adviser, Sir Nicholas Stern

Climate change is already costing large amounts of money. New Zealand agriculture is one of the industries most at risk. The 2008 drought in the Waikato cost the farming sector over NZ$1.24 billion; the estimated cost to dairy farmers alone was over NZ$500 million.

"…the number one group who'll be affected… is farmers... because you have all your assets tied up in one place, and catastrophic weather conditions have the potential to wipe you out." - Prime Minister John Key

In 2009, the Government extended drought relief to farmers in parts of Hawke's Bay, Gisborne/Wairoa regions, North Canterbury, Central Plateau, Taihape and Wairarapa. In January 2010, it declared Northland a drought zone.

The way we deal with climate change will herald either future prosperity or future decline.

US President Barack Obama and other world leaders have put green investment and green-collar jobs at the heart of their economic stimulus packages. Other countries are doing the same as they realise that sustained future growth is only going to be possible if they tackle the climate change crisis by switching to low carbon, green economies.

New Zealand has some catching up to do. Prime Minister John Key promised to balance the dual imperatives of economy and environment. Now is the time to do this. Let's put down a deposit on a smart, safe tomorrow. Why would New Zealand let this business opportunity pass us by?