Guest essay by Eric Worrall
Climate ambition meet Modern Monetary Theory – a slap for every remaining productive sector of the New Zealand economy.
Ardern says climate crisis is ‘life or death’ as New Zealand landmark report calls for sweeping changes
Climate Commission recommends shift to electric cars, large-scale agricultural reform and an end to reliance on gas in homes
Tess McClure in Christchurch @tessairini
Wed 9 Jun 2021 12.09 AESTNew Zealand has been handed a new vision for dramatic reduction of its greenhouse gas emissions – including reduced animal numbers on farms, no new household gas connections by 2025, and a dramatic shift to electric cars in the next decade.
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The report laid out pathways for New Zealand to meet its greenhouse gas reduction obligations by 2050. They include wide-scale agricultural reform to reduce methane emissions, dropping herd sizes by 10%-15%, ending imports of combustion-engine cars, eliminating new household gas connections, and less travel by car overall. Some of those changes would need to be dramatic transformations: to meet its goal for transport emissions, New Zealand would need to increase electric vehicle share of the market to 50% in the next 10 years. It is now around 1-2%.
At the release of the commission’s advice, Ardern said the report was “one of the most significant documents I’ll receive in my time as prime minister”.
She also noted that the path ahead would be challenging for New Zealand. “Having a roadmap doesn’t change the fact the road will be steep and tough at times,” she said.
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Read more: https://www.theguardian.com/world/2021/jun/09/jacinda-ardern-climate-crisis-life-or-death-landmark-report-new-zealand-electric-cars-farms
The full report is available here, but it is pretty heavy going. I didn’t make it past the self congratulation, assurances of respect for the indigenes, and repeated claims the report is objective. The signal to noise ratio makes it close to unreadable.
If New Zealand intends to follow the report recommendations, New Zealand likely needs to find a lot of money for subsidising Lithium electric cars, building new renewable generators, and building or renovating houses so they can survive New Zealand’s brutal winters without fossil fuel heating. But the Ardern government probably thinks lack of money is not a problem. New Zealand Prime Minister Jacinda Ardern openly embraces Modern Monetary Theory.
According to Wikipedia, MMT’s main tenets are that a government that issues its own fiat money:
- Can pay for goods, services, and financial assets without a need to first collect money in the form of taxes or debt issuance in advance of such purchases;
- Cannot be forced to default on debt denominated in its own currency;
- Is limited in its money creation and purchases only by inflation, which accelerates once the real resources (labour, capital and natural resources) of the economy are utilized at full employment;
- Recommends strengthening automatic stabilisers to control demand-pull inflation[10] rather than relying upon discretionary tax changes;
- Bond issues are a monetary policy device, not a funding device.
The idea appears to be governments can print money whenever they run short, limited only by the risk of triggering hyperinflation or stagflation. President Joe Biden’s advisors are also reportedly fans of Modern Monetary Theory.
While the already rich do very well in a loose fiscal environment, such as the environment created by practitioners of Modern Monetary Theory, some might suggest excessive money printing has negative effects, like debasing the value of the cash savings of pensioners and other people of limited means. But I guess the government can always help pensioners out with some of that newly minted money, if they behave.
There are well known methods to restrain demand pull inflation in a loose fiscal environment. For example the government could radically increase the supply of workers, flooding the market with labor, to counter demand pull upward pressure on wages. More workers chasing the same number of jobs makes it difficult to demand a raise, even if the cost of living is rising.
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Eric, please! I am not alone in having a phobic reaction to pictures of the P.O.S. with which you have adorned this post. Enough is enough.
Our collective energy would be better spent ensuring that this person is consigned to the history books as quickly as possible , as another failed attempt at a “communist ” paradise.
But the way we achieve this is by pointing out her mistakes, to make sure voters make the connection between Ardern and why their life is so messed up. Its not like MSM is providing balanced coverage.
Tell them the opposition party signed the country up to Paris Treaty making the reductions compulsory….or the taxpayers pay offshore entities to buy those paper carbon credits
What about electric cows? Are they OK?
How would this be possible with electric cows?
If NZ wants to be the guinea pig, then let them do it. Hopefully we will get the true consequences of their decision, not the leftist narrative utopian version, and hopefully Americans will see that those who aren’t wealthy will suffer – less money, less freedom, more government control.
Unfortunately it seems likely we will have to go over this self inflicted and self righteous cliff as reason no longer has any value in the general population. There is an article here (https://www.aier.org/article/lockdown-kitsch/) that argues the mass of people are experiencing something profoundly communal. Perhaps better to read the article rather than my interpretation and here are two extracts:
“If the Covid experience is indeed an aesthetic experience, the impotence of our counter arguments, our practical concerns and our personal pains is certainly explained very well. Those we wish to convince to change their minds are not using their minds; those we wish to share our concerns do not have concerns; those we wish to feel our distress cannot see us or our distress: they are caught up in a kind of satisfaction – occasioned by the concerted responses of governments and populations to an invisible global attack – that is comprised of a heady sense of profound community, of fellow feeling on a universal scale. We cannot touch this experience with our facts and our projects and our pains. At the very most, we can only threaten to puncture its ecstasy; insofar as we do that, we are batted away as an inconvenient distraction.”
“An immoral distraction too – which is why the batting away can get so ugly. An aesthetic experience, Kant advised, is not in itself a moral experience. Appeals to moral content and respect for the moral law detract from the disinterest necessary for the aesthetic mode. A fourth neighbour, with concerns about the morality of sipping wine under a midsummer’s sky while nearby children suffer from neglect has made a category error too. But not because morality is irrelevant to aesthetic experience, but because particular moral content is irrelevant to it. In fact, an aesthetic experience, because it is premised upon the setting aside of conceptual analysis, worldly projects and personal preferences, is excellent preparation for the moral and a good sign of a moral disposition; it only excludes particular moral issues. This explains the most curious feature of the Covid consensus: its combination of intense righteousness and ethical indifference; its simultaneous heady capture of the moral high ground and calm disregard for moral fallout all around.”
Beef = cow + field. Veg = field + fertiisers + tractor +plough + diesel + harvesting machinery + factory to make tractor, plough, machinery + iron ore smelting + steel industry + mining + oil extraction and refining.
The difference is staggering.
I think NZ could achieve these goals, the reason being that most of the population will leave.
At least 500,000+ NZers currently live in Australia. Some 40,000 per year IIRC, leave NZ for Aus not realising they are, since 2001, temporary residents on a 444 visa.
Australia signed up to Paris Treaty as well, so it’s coming there, like it or not, and they don’t have electricity grid at almost 80% renewable like in NZ . Your ‘adjustments’ are going to be harder…..wake up and smell the coffee
There’s no enforcement mechanism to the Paris “treaty”. It’ll only come to Australia if the Oz citizens continue to elect politicians that bring it.
“Australia’s INDC states that Australia will ‘implement an economy-wide target to reduce greenhouse gas emissions by 26 to 28 per cent below 2005 levels by 2030’
Thats nice that its flexible by 2%. But if you think its going to go away with some shrugs, dont say you werent warned.
There will be no adjustments. The public will not elect Marxist eco nuts like in NZ.
They are welcome, we want them
NZers voted for her, twice, and so much so the second time, she could for a majority Govn’t on her own without any other support. So, NZers (I am one too but don’t live there anymore so can’t vote) got what they voted for. Live with it!
Eating fewer cows means killing more animals for food. Plant food requires killing lots of animals (frogs, field mice, birds, boars etc.) to protect plant crops. Many die by chemical warfare, spraying of chemical agents, while grass that feeds cows doesn’t require any contamination, it is resilient by itself.
eg.
https://www.carnivoreisvegan.com/carnivore-diet-is-vegan/
https://www.youtube.com/user/reagentreview
How to abolish your country in a handy little manual.
My anecdote from the UK..
Quote:”….ould need to increase electric vehicle share of the market to 50% in the next 10 years. It is now around 1-2%.”
Just out of curiosity on my eBay ‘watch list’ is a Lithium battery (pack), nominally intended for storing solar PV = 48Volt and 2.4kWh capacity battery. How many to power a car?
Had been on sale for £797 and occasionally on offer at £717
To buy it (the last one seemingly) now will set you back £997.48 – at supposedly “Trade Price”
Just like the windmills innit, getting ever so cheaper cheaper cheaper they’ll be giving ’em away soon
I agreee with the call of Fewer Cars and More Electric. There is no denying that car emission shares a bigger part in green gas. Some cars like bentley bentayga really need to improve their fuel economy. But I puzzle over “fewer cows”. The explanation of it is not convincing, at least for me.
CO2 is good. Plant food. There been an uptick in the greening of Earth, even of the Sahara. That’s CO2 ! During the last glaciation the CO2 level fell to around 180ppm. Just 30 ppm above the Total Death Zone for all plant life on earth (at 150ppm). The foundation of the food chain of all life on earth. The industrial revolutions fuel sources of coal, and petroleum were for plants like an oxygen mask placed on the face of a blue faced emergency patient. I think a man managed rise in CO2 levels to the 1000-1200 ppm level would be a perfect target range. We do need to focus harder on the toxic byproducts of current production, and consumer waste. But, CO2 is a “Life Gas” … falsely accused.
grass fed cows release less carbon than they consume
We seem to be seeing a pattern here. Gasoline-powered cars – bad. Beef cattle – bad. I don’t like to suspect my own US government of being computer hackers, but the recent ransomware attacks on the Colonial Pipeline and then another on the country’s largest beef producer look to me like an INSIDE job by covert US. government operatives. With the current administration, nothing would surprise me.
Do Androids Dream of Electric Sheep – an old S.F. book…
I seriously wonder are we dealing with programmed ‘bots, or more likely ‘substances’ like Soma.
Even a cursory glance at the MMT wiki shows is is based on Abba Lerner’s functional finance. All this sounds cozy, and gives monetarists a warm fuzzy feeling.
When Abba Lerner was confronted in 1971 at NYC Queens College on Keynesian banker Schacht’s 1930’s policies, he blurted out ‘If the Germans had accepted Schacht’s policies, Hitler would not have been necessary’ – interesting how a Prof. showed his true face.
Schacht, founder with Bank of England’s Norman Montague, of the Basel-based Bank of International Settlements, was Hitlers economic minister. The BIS today is totally free of Swiss jurisdiction, and immune to any legal process.
‘Modern’ Monetarism may seem to be a quackademic aberration, until it puts boots on, or maybe high heels.
For those Hayek followers, note Lerner studied in London first under Hayek, then Keynes and Friedman. All 3 monetarists play a tweedle-dumb tweedle-dee battle, a step beyond Wonderland.
Hobbiton land will be fun to visit with all the push carts, permanent Tolkien sets, and villagers in rags.
Cut out the middle man.
Remove all covid restrictions and just let people die.
Government always wants to complicate things.
I’m sure I’ve previously requested you don’t display that woman’s picture without a warning.
What she and her enablers are doing to a once first world country is criminal.
“Obligations”, eh? Stupidities is more like it. I know they like to try to pretend the Paris “Agreement” is more than a bunch of virtue signaling by wealthier countries , power positioning by others (like China), and Free Money for everyone else but, seriously?
That’s actually a true statement…. though not because there is a “climate crisis” but because of the foolhardy policies being pushed by true believers of the phony “climate crisis” (like Ardern).
True, but that’s only part of the story. The other part is that doing so ultimately leads to the devaluation of the money (meaning you’ll need more of it to purchase the same level of goods and services). Print too much money and you’ll end up in Weimar Germany.
Again, while technically true (instead of defaulting, you print all the currency needed to cover the debt) it has the same results as point #1 – the more you print the less valuable each unit of your currency becomes.
Which, is a function of how much your money is worth (which is basically the sum total of the goods, labor, and other resources available in your economy). The more money you print, the less each unit of that money is worth.
It’s very simple: the total amount of currency you have represents the sum total value of your economy. When you print more, that means each unit of your currency will represent less of that total economic value.
Some illustrative numbers.
C(500 units) = E(1000) thus C(1 unit) = E(2)
If you double your units of currency for your same economy, you halve the economic value each unit represents.
C(1000 units) = E(1000) thus C(1 unit) = E(1)
Few things are more dangerous than an enthusiastic nut. Or a loose nut.
NZ better start using the misery index if they implement all those goals. First they should look at who is invested in green schemes.
Well, they’ve destroyed their tourism industry………….
Who will make the EV parts and batteries for NZ and Australia?
China has created a ‘dystopian hellscape’ in Xinjiang, Amnesty report says (yahoo.com)
What is New Zealand’s current electrical energy sector breakdown? Mostly fossil fuel? Mostly hydro? Nuclear? Wind? Solar?
The transport sector can reasonably be transitioned if there is enough electricity to every home to support two or more fast chargers (this is currently figured at least 100 amps (115 vac) per charger). Most homes in the United States would need service line upgrades for this and urban areas will have to be entirely re-wired.
Heating also, if there is enough dependable already-wired-to-homes electrical power and citizens can use “other people’s money” to make the transition.
Home cooking with electric will be OK, but commercial kitchens will kick up a fuss —
Does anyone on these commissions actually live a normal “man on the street” life (and live in New Zealand?) Do any of the commission members live in the countryside? Raise livestock? Understand New Zealand’s economy?
Kip Hansen asked
“What is New Zealand’s current electrical energy sector breakdown? Mostly fossil fuel? Mostly hydro? Nuclear? Wind? Solar?”
https://www.transpower.co.nz/power-system-live-data
RdM ==> Terrific, thanks. Are you in/from NZ? Do you know why the South Island is nearly 100% hydro powered and the North Island depends so much on gas and coal/gas?
Hi Kip;- Yes, I’m in Auckland, NZ – it’s ` 3:30am here now.
That’s live data, I think, so clearly solar is out (not sure of delay of reportage).
There is perhaps only hydro in the SI, and geothermal & coal (& gas, which is being nobbled due to politics, absurdly) in the NI.
Sorry I’m not an expert, & just happen to be up late enough to reply that much! ;- More later, perhaps. Cheers and thanks.
I mean, while there is hydro in the NI (I spent two boarding school years returning to home next to a hydro lake) there is much geothermal activity in the NI, unlike the SI, but I think I was wrong to mention that as a source of power to be had there. New offshore gas exploration permits have been banned, but what exists is still running.
The Huntly power station runs on gas & or coal but the Greens are pushing to phase out coal – now we are importing coal from Indonesia.
Some more from just one company here:
https://www.genesisenergy.co.nz/assets
E&OE!
Kip, some additional data, links:
There is indeed geothermal (steam out of the ground in volcanic areas) energy.
https://www.kiwiblog.co.nz/2021/06/labour_-_the_party_of_coal.html#comment-2958266
If you go to the top in this, um, relatively conservative centre-right libertarian blog, please note that here, the red-blue colours are reversed from what they would be in the US;- here, red is the socialist Labour govt, blue the National ‘conservative’ party.
Also see:
https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-statistics-and-modelling/energy-statistics/
and, accidentally discovered, but by no means all there may be to discover…
https://www.letstalkaboutcoal.co.nz/coal-in-nz/
Ross M.
New Zealand PM Jacinda Ardern, is trying to blame the cows, for the constant brain farts, she is having, no comparison, give the cows a break!