Yesterday, the Green Party launched a pre-budget policy … “as a first step in accelerating New Zealand's transition to a smarter greener economy” …but from what we’ve seen so far, there a few glaring issues with how they propose to get the green economy into the black.
They’ve said they would set up a “Green Investment Bank”, if they get into government. The bank would use public funds to leverage private investment, in order to rewire our economy and harness New Zealand’s clean energy expertise. Co-leader Russel Norman argues it could reduce pollution, create jobs and deliver solutions to environmental problems like climate change.
And as was pointed out, New Zealand would not be the first to create such a bank. Many of our trading partners in UK, Germany and the US have successfully set up similar clean energy investment houses to unlock the enormous economic potential in technologies that reduce pollution.
Russel Norman announcing the Green Investment Bank plan
Setting up a green investment bank shows some smart thinking about how we future-proof our economy. The reality is that globally, financial markets are starting to ditch investments in heavily polluting industries and instead steer billions of dollars toward clean energy development. And the Greens initiative will help position New Zealand to take advantage of this.
The thing is though, we’re not entirely sold on how the Greens plan to do it. And that’s because they’ve suggested pegging the bank’s funding to oil revenue.
Raising oil royalties to international standards would have the oil industry here running scared and would put the brake on any further drilling, which will be a step towards safeguarding our oceans and coastlines. Which is good, don’t get me wrong.
But the proposed green bank also relies on successfully getting oil out of the ocean floors. Which could be read as the Green Investment Bank being dependent on the ongoing activity of one of the most polluting industries on the planet.
I may be wrong, but I don’t think any other green bank has suggested such a direct financing mechanism and we think there are better ways to fund this investment like pension funds and green bonds.
Would it not make more sense to divert funds from the needless expansion of our so called ‘Roads of National Significance’ to fund the bank? Or establish green investment bonds, where Mums and Dads with savings can help invest in a more prosperous future for their children?
The Greens should be applauded for showing leadership in developing policies that will help shape and finance the future prosperity of our nation. And in doing so they have taken some of the more progressive policies from around the world to see how they would benefit New Zealand. Is aligning it with the spoils of the oil industry the right way to start building a cleaner, smarter future? I wouldn’t bank on it.
This blog is part of the #election2014 series. The series discusses New Zealand politics and the policies and, sometimes, lack of them, of our political parties. We hope that it provokes a bit of debate.
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