Columns, Opinion

Worldview: New Zealand’s effort to lead the world away from oil

Earlier this month, New Zealand’s recently elected Prime Minister Jacinda Ardern took the most drastic step toward fulfilling her goal of eliminating non-renewable energy sources by 2035 and creating a carbon neutral economy by 2050. How? By announcing a ban on all future offshore oil and gas exploration. While this announcement will not affect the 22 active offshore licences, the last of which is set to conclude in 2030, it is a drastic step toward eliminating the industry in the foreseeable future.

The reactions to this bombshell announcement are very much as one would expect. Environmental groups such as Greenpeace were ecstatic. “The tide has turned irreversibly against big oil in New Zealand,” said the Greenpeace New Zealand executive director, Russel Norman, according to an article in The Guardian. “Today’s announcement is significant internationally too. By ending new oil and gas exploration in our waters, the fourth-largest exclusive economic zone on the planet is out of bounds for new fossil fuel exploitation. New Zealand has stood up to one of the most powerful industries in the world.”

The conservative opposition and the oil industry, of course, had the opposite reaction, arguing that this decision will have no effect on the environment while being a form of “economic vandalism,” according to Jonathan Young, the energy and resources spokesman for the National Party, in an article for the Independent. In the same article, he denounced that decision as being “devoid of any rationale” and critiqued the logic behind the decision, saying, “It certainly has nothing to do with climate change. These changes will simply shift production elsewhere in the world, not reduce emissions.”

The National Party’s criticisms are not without merit. For one, the oil and gas industry is small in New Zealand, accounting for about 1 percent of the GDP and providing around 11,000 jobs. The environmental effect should not, therefore, be profound. Moreover, while it does have a minimal influence on the economy as a whole, the industry is heavily centralized in the Taranaki region in the west of North Island, where it accounts for 30 percent of the region’s GDP and 2 percent of its employment. Mayor Neil Holdom of New Plymouth, the major city in the region, told Radio New Zealand that Ardern’s announcement was a “kick in the guts for the future of the Taranaki economy.”

These criticisms, while valid, lack foresight and are entirely based in the present. In democracies, it makes sense to operate in this realm because the threat of being defeated in an election makes consideration of long-term ramifications politically dangerous. This is a major shortcoming of democracy as those who demonstrate the greatest consideration for their constituents’ futures are criticized for being exactly the opposite of that and oftentimes face consequences come reelection time.

Ardern seems disinterested by the potential short-term consequences, however, and repeatedly emphasizes the long-term benefits of this decision. She said, in defense of her decision, according to the Guardian article, that “Transitions have to start somewhere and unless we make decisions today that will essentially take effect in 30 or more years’ time, we run the risk of acting too late and causing abrupt shocks to communities and our country.”

And even though in the long run we are all dead, as John Maynard Keynes famously put it, neglecting the Earth for the sake of present political issues will have disastrous consequences. It may be true that New Zealand’s individual decision to phase out offshore oil drilling will have a minimal effect on the global economy and environment, but this reality does not justify inaction and complacency.

With this move, New Zealand joins France, Costa Rica and Belize as the only countries pledging to eliminate further oil exploration. Among that group, New Zealand is unique in that it is a significant oil producer. While the clout of this group is still miniscule in the grand scheme of things, adopting Young’s conservative mentality would prevent any progress whatsoever. Ardern’s decision in the broadest sense is therefore one of a trailblazer.

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