Rural round-up

November 16, 2012

Chinese interest in Fonterra fund ‘predictable’ Feds say:

Chinese interest in investing in Fonterra’s Cooperative Group’s shareholder fund was predictable once the scheme was approved and underlines the need for constitutional protections for the Trading Among Farmers scheme, says the main farm lobby group.

China’s sovereign wealth fund, the US$400 billion China Investment Corp, is in talks to buy units in the $525 million fund with an investment smaller than US$100 million, the Wall Street Journal reported yesterday, citing people with direct knowledge of the plans.

The Fonterra Shareholders’ Fund aims to raise as much as $525 million selling shares in an indicative price range of $4.60 to $5.50 apiece, giving outside investors exposure to up to 7 percent of the dairy cooperative’s equity. The final price will be set by a bookbuild among institutions and NZX firms on about Nov. 27. . .

Huge bio-fuels opportunity for NZ from forestry: Pure Advantage –  Pattrick Smellie:

New Zealand’s plantation forestry estate represents a major opportunity for New Zealand to become more self-sufficient in transport fuels, says the latest report from the Pure Advantage business lobby group seeking support for a “green growth” push in New Zealand.

However, a “crisis of faith” in the forestry industry could stymie the newly emerging potential of forestry – a sector that has long confounded attempts to add value beyond the export of raw logs, mainly to Asian markets.

Pure Advantage trust chairman Rob Morrison told BusinessDesk the fragile state of the forestry industry is a major issue for realising the largest economic opportunity identified by a study conducted by London economic consultancy Vivid Economics and the Business School at the University of Auckland. . .

Icebreaker launches online shopping:

Icebreaker, the iconic merino clothing brand, will launch an online store in New Zealand today, at icebreaker.comin time for Christmas shopping.

“It’s no secret that online shopping is the fastest growing channel in retail today, with clothing showing some of the highest growth,” says Jeremy Moon, Icebreaker CEO and founder.

“We’re a multi-channel business, and our new eCommerce site in New Zealand will complement our presence in retailers throughout the country and in our Icebreaker TouchLab retail stores in Wellington and Auckland. Our customers are increasingly demanding choice – they want to be able to choose to shop either directly from a brand, or from a retailer with a wide variety of brands.” . . .

Prince Charles inspects the Glacial Wool rug bearing his coat of arms:

New Zealand Wool Services International is pleased to make available the attached photographs of the Prince of Wales inspecting a unique six square metre Glacial wool rug bearing his coat of arms during his visit to the New Zealand Shear Brilliance wool exhibition at The Could in Auckland on 12 November. The rug has been commissioned by New Zealand Wool Services International to honour the Prince and recognise his role as a champion and patron of the global Campaign for Wool.


All that’s “green” isn’t good

July 2, 2012

“Green” might be the new black but all that is “green” isn’t necessarily good as this exchange from Question Time last week shows:

4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister for Economic Development: Does he stand by all his recent statements as Minister for Economic Development in relation to the Pure Advantage report New Zealand’s Position in the Green Race; if so, why?

Hon STEVEN JOYCE (Minister for Economic Development): Yes, especially my statements that it is important that New Zealand take advantage of all its opportunities for economic growth within sensible environmental and safety protections.

Hon David Cunliffe: Why, then, did he say that he fundamentally disagrees with New Zealand getting a slice of the $6 trillion world market export opportunity in the move to a clean economy, and why does he believe this would be “far too value-destroying” for the New Zealand economy?

Hon STEVEN JOYCE: Because the Pure Advantage** people promote shifting a whole lot of resources, particularly Government resources, into subsidising those industries as a way of actually achieving that level of growth, and although* we of course support and encourage our high-tech* and cleantech* industries—and some of them are doing a fantastic job—there is a limit to how much you can support them without being value-destroying for other parts of the economy. Also, saying that certain industries should not be invested in when they represent between them roughly 80 percent of our exports would be value-destroying.

Hon David Cunliffe: Why will he not heed the actual call by Pure Advantage, as clarified by chairman **Rob Morrison, to level the playing field so big pollution has to play by the same rules as innovative Kiwi cleantech* start-ups?

Hon STEVEN JOYCE: I am not quite sure what the member is alluding to, but I presume he means that industry should pay higher costs around, for example, emissions than they currently do. Of course, that would mean that they would be paying costs that their competitors in other countries do not face, which would be value-destroying. The challenge for New Zealand as a country trying to grow its exports is to make sure that it does not hobble its exporters with tests and costs that other countries’ exporters do not have to face.

Hon David Cunliffe: Why did he describe the Pure Advantage group of business leaders as self-interested and accuse them of bias in asking for “very big subsidies into industries and firms that would … not be economic …”, when its recent report does not call for specific subsidies; and if he cannot substantiate those claims, will he now withdraw and apologise to Pure Advantage chairman Mr Rob Morrison and trustees such as Mr *Phillip Mills, Mr *Jeremy Moon, Mr *Mark Solomon, and Sir Stephen Tindall*?

Hon STEVEN JOYCE: I am sure that Rob will be quite capable of the robust debate, as I am sure he has been in the past, and I have had good discussions with him about it as well. The point I was making is that in the report it talks a lot and in very positive terms of countries that make very, very big subsidies to industry, such as Spain and the Nordic countries—and also, for example, America with the Tesla Motors** company—and suggested that would be a model for New Zealand to follow. Obviously I disagree. . . .

“Green” jobs are supposed to be good but they come at a considerable cost:

Hon Tim Groser: Is the Minister aware that the Pure Advantage report suggested that a very good model to follow would be the Birmingham City Council** green growth strategy, which produced 270 jobs at a cost of nearly $2 million a job, and does he think that is a sensible model to follow for New Zealand?

Hon STEVEN JOYCE: Yes, I am aware of that and a number of other models cited in the report. I think that illustrates the problem with the approach. The debate has actually moved on and in the New Zealand economy we are focused very much on greening our successful export industries and developing new industries, and not just trying to pick winners, as Mr Cunliffe seems to be advocating.

We have only one world and it behoves us to take care of it for those who follow us but sustainability is supposed to balance economic, environmental and social factors.

All that’s “green” isn’t good when it’s based on emotion rather than science and if it doesn’t stack up economically and socially.

Greenwash or hogwash?

June 17, 2012

When I blogged on the release of Pure Advantage’s Green Race Report a couple do days ago I raised the problem of greenwash.

Trans Tasman has given the report a closer reading than I did and has found a little of what might be described as hogwash.

Yet another report from a Green lobby group has berated NZ’s environmental performance.The Pure Advantage group’s “Green Race Report” criticises NZ’s environmental record and argues NZ urgently needs to improve it in order to protect the “clean, green image which benefits the sale of much of what NZ produces and exports.” It follows the recent World WildLife Fund report which was said to be a “wake-up” call to NZ before the Rio+Earth summit on June 20 marking the 20th anniversary of the Rio One summit.

Like the earlier report, the latest contains a fair bit of claptrap. It claims NZ’s per capita carbon emissions are the fifth worst in the OECD, without mentioning most of the emissions come from cows which produce more than a fifth of NZ’s export earnings. It says NZ has a falling share of the energy mix coming from renewable energy, without saying NZ produces 70% of its energy from renewable sources, a much higher level than most other countries.It also says: “Perhaps worst of all, NZ’s native biodiversity is coming under increasing strain as 77% of NZ’s threatened species look set to decline” – a claim debunked by science authority Bob Brockie, who says the NZ Conservation Dept has worked wonders in protecting our plants and animals.

This selected use of facts does the cause no favours especially when among those who echoed the criticism in the report are those who oppose attempts by power companies to develop more generation from renewable sources.

Doing what we can to safeguard and enhance the environment is sensible in its own right.

There are also opportunities for businesses and the country if we do so, but let’s get our facts clear before we start.

Neither greenwash nor hogwash will help.


More gain from more green?

June 13, 2012

Would New Zealand gain more from being greener?

“New Zealand’s Position in the Green Race” , a report by the business group Pure Advantage is certain it would:

. . . The report explains how green growth is a path to improved economic performance, better paying jobs, the protection of our environment, and improved health outcomes for New Zealand.

The report highlights that what has been missing from the discussion over the change to a green economy, is the many benefits of green growth. Much of the debate in New Zealand to date has focused on the downside, the various costs and obligations. But rather than a burden, green growth can be an economic pathway to create sustainable wealth and promises a revolution in how we structure our economy and society . . .

But what exactly is green growth?

The report defines it:

Green growth is the aggregated economic benefit that comes from minimising waste and the inefficient use of energy, reducing pollution and greenhouse gas emissions, enhancing natural resources and biodiversity. it is an economic progression driven by a series of interrelated and unprecedented global commercial imperatives, including the geopolitical drive for domestic energy security, exploding population growth, changing social demographics, mounting climate obligations, rapid decarbonisation of economies towards renewable energy and initiatives to conserve natural resources, particularly water. rather than a burden, green growth is an economic pathway to sustainable wealth.

Global green growth is potentially worth NZ$6 trillion a year. to date much of the green debate in New Zealand has focused on the downside: costs and enforced obligations. Pure advantage has been formed to focus on the economic upside of being green and to catalyse the implementation of green growth economic strategies in New Zealand. we believe that enhancing New Zealand’s environment represents a huge opportunity for New Zealand to improve our international competitive position. 

But what exactly does that mean in practice? Presumably it means more green jobs, but what are they?

Tim Worstall found the US Labor statistics’ definition:

Green jobs are either:
A. Jobs in businesses that produce goods or provide services that benefit the environment or conserve natural resources.
B. Jobs in which workers’ duties involve making their establishment’s production processes more environmentally friendly or use fewer natural resources.

What this means is that absolutely everyone who works at an oil refinery has a green job. For everyone who does work at an oil refinery is trying to “use fewer natural resources”. In fact, everyone who works in anything at all of a capitalist or market nature now has a green job. For all of us are, always, attempting to reduce the resources we use in order to produce our output.

There is more to a green economy than green jobs and there is little doubt that  green is a powerful brand for the upper and middle income people to whom we want to sell our produce.

We could gain from being greener, if we could agree on what that meant, if that definition and the practices built on it were science-based, and balanced environmental, economic and social concerns and was not just greenwash.

Green could be competitive advantage

July 9, 2011

Being greener could bring both environmental and financial gains and this week Environment Minister Nick Smith and Agriculture Minister David Carter launched a green growth discussion document:

New Zealand needs to consider how it leverages off its clean green brand in global markets and how new technologies can be developed to reduce environmental impacts, Environment Minister Nick Smith and Acting Minister for Economic Development David Carter say.

The Ministers today launched the Advisory Group on Green Growth’s discussion paper in Wellington. The eight-member Advisory Group was announced by the Government in January to ensure the Government receives the best advice on green growth initiatives.

“There is significant work occurring internationally on green growth, green jobs, and clean technology. We need to ensure Government policy helps New Zealand take up the opportunities,” Dr Smith said. . .

Mr Carter said: “This is another part of the Government’s plan to build a faster growing economy. The world is looking for products and services that have lower environmental impacts and we want New Zealand to be well placed to take up these opportunities.

The government’s actions haven’t impressed Pure Advantage a group of business people who believe there’s a huge opportunity in enhancing New Zealand’s natural environment in order to improve our competitive positioning in the global shift to green growth.

We have developed a campaign to work with communities, businesses, Government and iwi to create sustainable economic growth, and assist New Zealand to become a leading exporter of high-value produce, renewable energy and clean technology, with a top-tier in-bound tourism industry.

The founding members have funded the campaign – there’s no corporate mandates or shadowy Government funding. Just successful Kiwis interested in seeing a lot more successful Kiwis.

The group wants to open the debate and fund research and discussion in the hope of getting broad agreement about the best way forward.

Once the way forward is understood, we will drive the change to make it happen.

Underpinning our goal will be robust economic research showing the scale of the challenge and why all New Zealanders must reach for the exciting opportunities arising from green growth.

Members of the group include Air New Zealand chief executive Rob Fyfe, former General Motors chief financial officer Chris Liddell, IceBreaker founder Jeremy Moon and brothers, Lloyd and Rob Morrison.

The environmental gains from being green are obvious, providing that is based on science and not emotion.

Pure Advantage and the government both also see the potential for financial gain.

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