Thursday 12 August 2021

Take Back Your Power! What A Real Labour-Green Government Might Do To Combat Climate Change.

“Come On, Kiwis, It’s Time For Action!” In our dreams the Government-inspired “Take Back Your Power!” campaign brings an impressive number of New Zealanders on to the streets. At what is billed as the campaign’s “Struggle For Tomorrow” rally, the Prime Minister delivers an impassioned speech about the need to fight Climate Change the way our parents and grand-parents fought fascism.

ON THE SAME DAY as the IPCC warned us of impending doom, half the country’s lights went out. It was a sign. Like the chilling wailing of air-raid sirens that echoed across London just seconds after Neville Chamberlain told the people of the United Kingdom that their country was at war with Germany, the IPCC report and Transpower’s enforced “load reduction” signalled a shift from one state to the next. Except that no one in charge seemed to notice. Energy Minister Megan Woods huffed and puffed at Genesis Energy, but none of her Labour colleagues were in any hurry to blow the profit-driven electricity market down.

And the Greens? Astonishingly, they were in no greater hurry to call time on profit-driven energy than Labour. Proof – if further proof is needed – that the Greens’ commitment to fighting global warming is about as serious as the Exxon Valdez’s commitment to clean ice. Tragically, there isn’t one member of the current House of Representatives willing to urge the utterly obvious and desperately needed next step: moving Aotearoa-New Zealand on to a war-footing against Climate Change.

Only the assumption of full war powers will equip this, or any other, government with the legal authority necessary to reprioritise the economy and mobilise the population against the existential threat of an overheated world. But, since it is not yet possible, in this country, to point to a flesh-and-blood enemy at the gates (although, one might have thought that all those recent floods came pretty close!) obtaining the electorate’s permission for such a drastic and irrevocable decision will require a bit of fancy political footwork.

Since neither the Labour nor the Green caucus possesses a person with the requisite dancing skills, it will be necessary, from here on, to imagine a Labour-Green Government positively overflowing with politicians who know all the steps and who are willing to make all the necessary moves.

So, it’s Monday night, the PM and her colleagues have their noses deep in the IPCC report and the phone rings. It’s TVNZ’s political editor, Jessica Mutch McKay, asking for comment about the Waikato black-out. Just as soon as everyone calms down, and the Energy Minister stops heaping all manner of unprintable curses upon the heads of Transpower and the profiteering “gentailers”, the Prime Minister suggests that everybody takes a deep breath and spends a few moments considering the extraordinary opportunity which this unique confluence of events has dropped into their lap.

As understanding slowly dawns in her Cabinet’s eyes, the Prime Minister presses on. She suggests that, in the light of the “Code Red” IPCC report, and the abject market failure evident in the deliberate shutting-down of the power-grid across much of New Zealand (not to mention the fact that the Government only got to hear about the blackout from the news media) the Cabinet determine that the re-nationalisation of the entire energy sector is now an urgent necessity.

Naturally, the Labour-Green Government experiences immediate and massive pushback. The National and Act parties are the least of their worries. Most of the pressure comes from the public servants employed by Treasury, MFAT and MBIE. Nobody re-nationalises whole industries anymore, the Cabinet is informed. At least, not with any intention of holding on to them for any longer than it takes to rescue those that are “too big to fail”. Very soon, the officials are leaking like sieves to employer lobby groups, right-wing think tanks and the news media. The whole neoliberal establishment pitches in, confident that the Government will soon buckle under the weight of so much “mainstream” opposition.

The Prime Minister just smiles. This is exactly the response she anticipated, and she is ready with her counter-move. The word is passed along to Greenpeace, Action Station, School Strike 4 Climate and the CTU that the Government could use a little help on the streets. The PM’s spin doctors prepare a list of talking-points to emphasise, in what it hopes will become a popular campaign to re-nationalise the energy sector.

Re-nationalisation will:

  • Hasten the shift from fossil fuels to renewables
  • Keep electricity prices under control
  • Ease the transition from the internal combustion engine to electrically-powered motor vehicles and facilitate the full electrification of the railway network
  • Allow for coherent long-term energy planning
  • Simplify the funding and construction of new energy generation facilities
The Government-inspired “Take Back Your Power!” campaign brings an impressive number of New Zealanders on to the streets. At what is billed as the campaign’s “Struggle For Tomorrow” rally, the Prime Minister delivers an impassioned speech about the need to fight Climate Change the way our parents and grand-parents fought fascism:

Nobody complained then about the state taking over the economy and asking everybody to play their part in securing victory. And yet, today, with the future of humanity itself hanging in the balance, the promoters of profit and private gain insist that we cannot mount a collective defence against Climate Change. They do not, even at this eleventh hour, understand that we are confronted with the moral equivalent of war – a total war for the survival of life on earth. If we cannot rely upon their co-operation, then we must insist upon their acquiescence. In the war against Climate Change we will not tolerate a fifth column of do-nothing-deniers!

With the cheers of her supporters still ringing in her ears, the Prime Minister drives through the re-nationalisation legislation under urgency. With many voters urging her government to take the next logical step and put the country on a full war-footing (as she hoped they would) the Prime Minister bolsters the already declared Climate Emergency with a comprehensive legislative package giving the Labour-Green Government powers equivalent to those wielded by Labour prime minister Peter Fraser during World War II.

In a Facebook post to her followers, the Prime Minister recalls Winston Churchill’s grim observation that he had nothing to offer the beleaguered British people but “blood, toil, tears and sweat”. Smiling, as only she can, the PM declares:

I am confident that I can spare the Team of Five Million Churchill’s blood, but toil, tears and sweat there will be in abundance. You have my solemn promise, however, that the burden of rescuing our planet will be borne equally. And when we are safe, you may rest assured that the lessons learned in the struggle for tomorrow will not be forgotten.

Now, if we could just lay our hands on 60 or 70 of these “do-something” politicians, then hoping for a cooler future might not seem such a pointless exercise.

This essay was originally posted on The Daily Blog of Thursday, 12 August 2021.


Andrew Nichols said...

Mad Max Bradfords insane break up of Electricorp finally bears its evil fruit. The idea of serious competition in a nation as amll in area as a minor province in most nations and a polulation equivalent to an average global city where a single supplier is the norm must surely be at an end. The Govt has two option to achieve a stable energy supply and a carbon free future in the sector. 1. Renationalise and have it run by engineers with those two goals to achieve 2. Appoint a state Energy Tsar with full control to coordinate the whole system to the same ends. To continue with the current situation is madness.

Kat said...

And reinstate a 21st century MOW to form the backbone of infrastructure development and maintenance, oh and to focus on getting houses long do we hold our breath.

Campaign rally billing could be "Passing wind against thunder"

Nick J said...

Andrew, Im sure you said the same when New Labour were launched so many years ago. I certainly did. None of the Rogernomes have understood the basic dynamics of monopolies, duopolies, cartels, especially in utilities. In short they control markets, and not vice versa through fair market pricing. That was never going to happen. Nationalise them, definitely.

Ricardo said...

A lack of security of gas supply and a toxic attitude to coal frame the market even before the sun not shining and the wind not blowing. Don't blame the market, blame the design and parameters placed upon it.

Ah yes nationalisation, where history does not matter.

- Do the asset owners get fair compensation or is it just state theft?
- Of course MBIE has far more expertise in power generation and distribution
- of course government apparatchiks will know how much is needed, precisely when and by whom and for what correct purposes.
- guaranteed cheap power to south Auckland will do nicely, less so for wealthier more rural electorates regions
- of course giving politicians power to alter prices when where and how they see fit can never cause damage or revolution
-of course politicians will know how best to plan for future needs and preferences and how to best invest in what technology, not necessarily that offered by political allies/cronies/favoured suppliers or donors
- so on and so on and so on

Wayne Mapp said...

What exactly does spending several billion dollars to renationalise the entire electrical industry actually do? My answer, absolutely nothing. All it does is establish a new government department (or SOE) running the electricity system. So a vast increase in the national debt to achieve nothing new. Unless of course you try the Cuban or Venezualan solution of nationalising without compensation. If nothing else, New Zealand would become an economic pariah going down that path.

If the government really does want to do the things you want, it could be done by regulation, or indeed spending the several billion that you would spend on nationalisation to actually create new generation systems and incentives to industry, farming and households.

I appreciate you and I have very different views when it comes to the economy, but I could but help a wry smile that the first recourse of those who are of the old left always think the answer to just about anything economic is to nationalise it.

I suggest a the bit more imagination the dredging up nationalisation is required to make a difference on climate change.

I actually trust Jacinda and Grant will be more imaginative about the solution. Their success on Covid 19 was bringing the whole community with them. Surely that is a pointer forward..

Jens Meder said...

But if re-nationalization requires extra taxpayer funds for buying back the privatized shares, then would it not be more productive to put that extra money straight into the additional investments in electricity required for reducing blackout dangers ?

And is not giving up on the priority need of profitability a dangerous self-deceiving shift towards subsidized production for needs regardless of costs, which can only be kept going from profits or consumption potential in other areas, and ultimately ends up in widening poverty instead of the initially imagined benefits through no "profit costs"?

Jennie Mae said...

It annoyed me that the media persisted in calling ActionStation "grassroots", a "youth movement", or a "community group" when they've been a registered third party lobbyist for the past two general elections.

The Barron said...

What can be denationalised can be renationalised. Strategic assets were sold at bargain basement prices and can be repurchased at a fair price.
The neoliberal economic zealots of the late 20th century cannot enforce the doctrine of 'no take backies' of future generations.

sumsuch said...

We can't do anything according to you. Nor turn our exports away from China. Eloquence without reality is Cicero. I don't see any point in you unless you speak truth. Willing to pay for that. By your behaviour you're a dubious bloke.

PaulVD said...

Numbers matter, Chris.
For NZ to put itself on a war footing against climate change would not be the equivalent of Britain declaring war on Nazi Germany: it would be the equivalent of the Duchy of Grand Fenwick declaring war on the USA. By all means, let us ally ourselves with those whose actions will actually have an effect on climate change. For example, we could commit ourselves to matching every action that China takes to reduce emissions, since China is by far the largest emitter of CO2.
Oh, and "the IPCC warned us of impending doom" suggests that you have not actually read the IPCC report, but rather are getting your take from the lobbyists. You would quickly find that the IPCC is backing way off from its extreme predictions: the RCP8.5 scenario that it formerly treated as a 'reference scenario' for what is likely to happen (and that our Ministry for the Environment juiced up to its own RCP8.5+) is now regarded as not likely. The business-as-ususal scenarios are now 4.5 and 6.0, under which nothing very horrific is expected.
Finally, you seem to have missed the news that the power blackout was entirely the result of mistakes by the publicly-owned bits of the system: Genesis (majority-owned by the Government) and Transpower (wholly owned by the Government). Just how nationalisation of state-controlled activities will make them run better is not explained.

CXH said...

All of which will do almost nothing to save the planet. What these strong politicians could do is refuse to deal with countries that are increasing their carbon output. Countries that are importing more coal for more power stations every year. Countries that are making no real effort to change. That would be a good start rather than trying to stop our miniscule emissions.

Unfortunately that would involve dropping China as both a buyer and supplier. That would involve real consequences for the wealthy. So instead, we tinker around the edges. Pretending we are making a difference, just making sure it is others that have to pay the cost.

As for nationalising our infrastructure, look at the mess made of a simple thing like MIQ, or getting a vaccine tracking system. To think those same eople could run our power system is laughable. Sadly.

bob said...

Love your comedy posts Chris. Keep them coming!

Nick J said...

On second thought Wayne, maybe you are right. Compensation should be paid, and yes there has to be some pricing mechanism that delivers both sufficient reinvestment for supply purposes and a fair retail price.

Where we may differ is that when electricity supply was privatised I was dubious that there actually was a solid case for benefit to the end user. I suspected it was an ideological excuse for private gain and to prove the whole efficient market model. You were close enough to the action to comment.

To satisfy myself on these matters, because we can be wrong I checked out what people like Brian Easton observed. I checked what I could from Stats NZ and power industry sources.
Conclusion is that there have been huge benefits to investor returns, significant but insufficient investment for the future and no price advantage delivered to consumers. There is however a counter argument that before 87 that prices were heavily subsidised and that current prices are maybe insufficient. Given different tax regimes etc that may be a bag of worms.

So what would renationalising achieve? Probably a costly way of proving neither model works well.

I think a far more constructive question is how can we achieve a sustainable supply in a world where fossil energy is declining and environmentally damaging? I dont see either private capital nor Wellington bureaucracy as an answer. I do see the engineers free of ideological constraints being capable of designing options that the people could decide upon.

DS said...


The New Zealand electricity sector is a natural monopoly, and currently consists of an oligopoly. As I am sure you are aware, oligopolies will tend to supply less than the ideal quantity of output, so as to maximise profits. Which means one of three things needs to happen:

(1) Break up the oligopoly into smaller and more numerous firms... except that the nature of the electricity market tends towards consolidation.

(2) Regulate price and output. Which you would almost certainly decry as Communism.

(3) Nationalise. Which you would decry as Communism.

Now (2) in practice means that price and output are set by the Government, not by firms. The only difference between (2) and (3) is that the lower-than-current profits of (2) still go to the private sector, whereas under (3) they go to the Government. Leftists would prefer the latter because it provides revenue for social programmes.

Anonymous said...

@Jennie Mae

Not to mention that their funders are a who's who of Silicon Valley.

David George said...

The challenges of ending fossil fuel use are massive, unsurprisingly the "lets do this" types are completely unaware of what's involved.
Sixty percent of our energy is from fossil fuels, forty percent is from renewables like hydro.

Even allowing (hoping really) for a significant improvement in efficiency and moderation of overall energy consumption of, say, 20%; re-tooling our transport fleet, industry, agriculture and homes to 100% renewable electricity would require more than a doubling of renewable power generation and distribution. And some significant developments and discoveries of scalable new technologies. Never mind that and the distribution issue - Cook straight in particular, we'd need hundreds of new medium sized generation facilities or twenty projects the size of the Clyde dam. A project that takes all the waters from Wakatipu, Wanaka, Hawea and upper Clutha catchments and took twenty years to design, consent and build.

Where is the actual plan for all of this? Is the unbelievably stupid "let's do this" incantation the extent of it?

Nick J said...

David George, it is useful to recognise empirical facts that you quote about our energy supply. The 60 percent non renewable will get used and go away. But it wont be replaced by renewable hydro power because we dont have any more catchments left to plunder. Even those have a finite life due to sedimentation. We have a problem Houston. Step one is to recognise it and get over technonarcicist solutions like electric cars.

sumsuch said...

Do you remember how the German MMP leaders lasted for many years? Is that German or MMP? Lets find out. Is Vicki Buck at 65 our Angela Merkel? Adenauer was surely older. And we need her as much. If we call her she will come.