With the news of Fonterra lifting their forecast per kg milk solid by +20 cents reinforced by the latest Global Dairy Trade auction results rising yet again by +1.8%, the short to medium term outlook for dairying is looking financially secure.
Even if there are elements trying to knock the industry off its No 1 status.
Jim Hopkins on "The Country" put voice to what many in the rural sector must be feeling; that is, How come Tourism is being let off the hook?
If in the need to meet our reduction commitments it is good enough to target agriculture why is there not a 15% reduction in tourist numbers as well. Tourism, if done properly, should be able to ramp up returns with higher value visitors and reduced numbers. Covid-19 could work both ways here.
The desire to travel may be reduced however New Zealand must look more attractive as a destination, especially to higher value travellers. It is possible that it may also find a lower ‘natural’ equilibrium, as agriculture may.
The specific omission of Tourism, given it was our largest industry, from the agenda of the Climate Change Report does make the impartial nature of the report questionable.
Back to dairy, the underpinning of the export base by China continues and information from the South China Morning Post (SCMP, a reasonably balanced publication from Hong Kong) shows that while the situation in China is still somewhat precarious with a continuation of outbreaks of COVID, the outlook is looking increasingly positive economically.
China's GDP rose +2.3% for 2020 which although the lowest for 45 years is still likely to be the highest of any G20 country. Perhaps more importantly it is forecast by the IMF to reach +7.9% in 2021. Despite the pandemic China still hit record high export figures by US$535 billion above 2019.
New Zealand has also achieved some records over the period. By the quarters we have gone from record lows (-11.2% June Q) to record highs (+14% in September Q). Up to the end of September year on year New Zealand is still behind -2.2% on a GDP basis. However with what looks to be a reasonable December quarter this negative should get eroded and forecasts are for a +4.5% in 2021.
The SCMP also took a very positive stance on the latest signing of the updated free trade agreement with China and certainly publicly New Zealand has favoured status through their media. This has no doubt been assisted by Minister of Trade and Primary Industries Damien O’Connor whose gaff last week rightly offended Australian politicians.
China may be important for trade, however, Australia is also and our closest neighbour and closest ally.
In my eyes O’Connor is increasingly looking to be a liability if not to the government then to agriculture.
Australia’s approach to their relationship with China may be questionable, but it is not our job or wise for us to get involved. Perhaps interestingly, the SCMP has suggested that New Zealand could be a useful ‘intermediatory’ in resolving some of the difficulties China and some of the other “Five Eyes” nations have in dealing with China. This would appear to be a risky path to follow with New Zealand coming out the loser on all fronts.
A footnote on the SCMP before readers get on my back. Based out of Hong Kong it was founded in 1903 and at one point was owned by the Murdoch empire. Since 2017 it has been owned by Alibaba and consequently has been criticised as being a tool of ‘soft propaganda’ for the Chinese regime. However, despite that it is still a useful source of information so long as a degree of scepticism is applied when reading their reports.
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23 Comments
The Climate Change Report specifically excluded aviation emissions. To my mind that shows total hypocrisy, their reasoning is they're not obliged to include them so why should they. I notice with no tourists NZ's imports of Aviation fuel have gone from 92,000 T in the March quarter to 5 and 2.5 KT in the two following quarters.
I also saw Fonterra is trialling a feed additive which potentially reduces methane emissions by 30%.
https://www.stuff.co.nz/business/farming/124093975/fonterra-partners-wi…
sparrow,
I think you misinterpret the CCC position re aviation emissions. They do not include them because at this stage they cannot be included as Paris obligations and commitments. But the CCC does acknowledge that aviation emissions are relevant to climate change.
KeithW
It is not only flights for tourism, Minister of the Environment David Parker is lobbying for NZ to become an international air-hub linking China and South America. Hoping to attract overseas investment, so we can get more planes flying and presumably kill the planet that much faster.
https://www.rnz.co.nz/news/business/392901/new-zealand-ticks-all-boxes-…
So tell me sparrow, how would you account for the emmissions? This is an honest question. Start counting them on every aircraft inside the 200mile EEZ or charge the airlines on their total journey to and from NZ? Count the start point from original takeoff point or just from the nearest stopover - whilst flying through someone else's airspace? Or would you only charge domestic connections even though some airlines land in CC then fly on to Auckland. Would you charge the working aircraft (Ag spreaders, rescue flights, survey flights, tourism flights) or just the major airlines? What about private aircraft?
You could count for the emissions of every departing flight for each country - so that a tourist coming here would have one leg of the journey accounted for by their home country and we would have to count the return trip. If it's a multi-leg trip the stopover countries would have to account for some of it. Any system would be better than nobody taking responsibility.
Domestic aviation is already counted AFAIK.
I noticed that John Kerry accepted an award in Iceland this week for his contribution to climate control.
When questioned by a reporter whether it was necessary for him to have taken a private jet to Iceland to accept the award he replied, "how else am I going to get here, sail?"
I am good with reducing emissions, I am very far from good with the hypocrisy of the elite and I will not adjust my travel (when able) as a result.
Whatwill happen
Your are confusing me with Guy.
I have made no comments on what Damien O'Connor said.
I note that the Herald said Damien was absolutely correct, but that it would have been better had he not said it.
I simply say that we need to chart our own course with China and all other countries as an independent nation with its own priorities.
KeithW
That is a good point about wealthy tourists.
Why are we not offering luxury isolation facilities for the wealthy to come to NZ, do their quarantine and then they can live normally? Im sure there are a multitude of rich people that want to get away from America or Europes covid lockdowns. Fewer people but with more money.
Fun Fact - The major economic instruments being created by the Paris Agreement are tradeable carbon credits. These "work" by as the closer we get to killing the planet the faster these things appreciate in value. The idea being that as they appreciate in value it will incentivise people to find innovative ways to create new carbon credits.
However this shall also incentivise the holders of existing carbon credits to prevent the creation of new carbon credits. The holders of existing carbon credits are mostly too-big-to-fail global capital, cash rich from a decade plus of QE.
It was a nice planet while it lasted.
I think I recall that aviation is excluded from the Paris Agreement because of some protocol dating from post WW2 that prevents the taxation of aviation fuel .The aviation industry has apparently agreed to begin addressing the issue in 2026. But the Climate Change Commission was intended to be apolitical. To my way of thinking they have entered the political arena by making industry specific recommendations. They would have served us better if they had simply stated the quantum reduction needed to meet a specific target, and presented a range of options for government to choose from. As it stands, they have simply provided the government with political cover. As to the proposed reductions of livestock, I would have thought that the food security provision of the Paris Agreement was intended to supersede emission reductions from that source. The CCC anticipates that there will be no reduction in production as a result of reduced stock numbers, but does not attach any priority to this. The Paris Agreement calls on the world to reduce its emissions, but its corollary is that not reducing emissions is acceptable provided doing so maintains security of food supplies.
Air traffic serves an important climate cooling purpose:
https://scitechdaily.com/covid-19-lockdowns-caused-cleaner-air-and-warm…
wee willy winky,
I agree that the Government and the agricultural industry have failed to use the food security argument. Given the role of whole milk powder in particular as an important source of nutrition in the developing world, this failure does seem notable and surprising.
KeithW
keith - It has been brought up but govt isn't interested - it messes with their virtue signaling. Afterall, they have advisors - the CCC - that are saying we can drop livestock numbers and still produce the same or more. Just how of course it not stated. But it sounds good.
The productivity of meat animals has apparently increased 1% per year for a long time. (Don't ask for a source- it's hearsay from someone who I'm confident is qualified to comment) This is achieved through less wastage (e.g. needing to slaughter animals without harvesting their meat for a variety of reasons an therefore having to have more animals as "spares") and improved genomics. While I was critical of the calculations, we can get halfway there with the status quo. The other half is up for grabs.
FYI, In an interview I did with Climate Change Commission Chairman Rod Carr last year, he spoke at length about tourism - https://www.interest.co.nz/news/104656/climate-change-commission-chairman-rod-carr-sees-opportunity-have-good-think-about-what
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