Last week a coalition of over a dozen New Zealand business and industry groups – including heavyweight exporters DairyNZ and the Meat Industry Association, Federated Farmers, mining group Straterra, the Motor Industry Association, the New Zealand Initiative, and BusinessNZ – penned a formal letter to Rod Carr, chair of the Climate Change Commission.
“We are pleased that the commission has, in response to requests, begun to release the models and underlying data that supports the commission’s findings,” it said.
“However, to constructively contribute submissions so that the commission is as well-informed as possible, we must be able to thoroughly review and comment on data and models which will influence major decisions about the future of our economy and society.”
“Given the delay in the release of crucial modelling data (not all of which is out yet),” the letter asked for an extension of the March 14th deadline for submissions by at least two weeks.
It’s a considerable failure that the commission neglected to release this data three weeks ago, along with the draft report. And the drip-feed of information, less than three weeks from the submission deadline, now threatens to reduce the window of public consultation to theatre.
So far, the commission has released peer reviews of its modelling approach and some underlying data. On February 10th, it also held a workshop to discuss the modelling, though the models themselves were not released. It also has a second webinar session to discuss “cost conclusions” scheduled for February 23rd.
Critically, the commission has not provided either sensitivity analysis nor the marginal abatement costs, broken out by industry.
That data matters. Sensitivity work helps economists to understand just how precarious that “less than 1 per cent of GDP” figure is. Will it alter significantly with slight adjustments to inputs? And the industry data for abatement cost would allow interested parties to properly test the assumptions the commission has made. . .
The environmental impact of the CCC’s recommendations will only be known in hindsight but there is no doubt that they will come at a considerable cost which will have a significant economic impact.
The Climate Change Commission’s recommendations span the breadth of the economy. They are required to come up with sector-by-sector climate budgets consistent with getting New Zealand with net zero emissions under the Zero Carbon Act.
The sector-by-sector budgets rest on underlying models. The models build predictions about what will happen as ETS prices rise, and what will happen when some additional constraints are put into the system. Some of the CCC’s recommendations then mandate what they think are their best guesses about what a carbon price would do, subject to those constraints.
The scope is vast. The entire economy, really.
And the Government has already signaled that it will just do whatever the Commission says to do.
So getting things right seems to matter and is rather high stakes.
In that kind of situation, you’d think that the underlying models would be available for checking and testing. Getting bits wrong could be really really expensive, whether you want to frame it as economic costs, or as carbon mitigation forgone.
But the Commission is not in a sharing mood. . .
You might have hoped that plans that have potential to re-engineer the entire economy would have more provably robust underpinnings. . .
You might in deed.
A media release from the CCC advises that it will extend the deadline for submissions by two weeks. Nothing is mentioned about releasing all its data.
It is impossible for anyone to make a fully informed submission without all the information on which the CCC’s recommendations are made and that includes all the data.
The CCC’s final recommendations and the policy the government implements as a result of that, will have significant and long-reaching consequences. Failing to release all the data in time for submitters to analyse and understand is handicapping them, sabotaging the submission process and that in turn will make it much harder to gain support for the policy.