Thinking about the future of Hawke’s Bay
The Hawke’s Bay Regional Council’s formally adopted goals and objectives covering issues such as water, land-use change, climate change, energy and regional infrastructure are steps in a journey, which is about getting better at interpreting, learning about and adapting to major trends.
The trends I’ve chosen to discuss here – climate change and demographic change – are getting plenty of press currently and will continue to do so; but despite this, the consequences of these trends remain complex and uncertain. I’m addressing these two because their impacts are likely to be significant for our region, highly interactive and far from predictable.
The first trend is global warming, the impacts of which will be pervasive. When 90 percent of the world’s climate scientists are convinced the planet is warming at an increasing rate (noting that scientists are trained to be sceptical and also seek very high degrees of certainty), then it suggests to me that there’s a very significant challenge. There’s still some debate over the human induced drivers of climate change, but institutional acceptance is now mainstream and the debate is largely about degrees of difference in how to respond.
In linking climate change to greenhouse gas emissions, a US based strategic consultancy firm, McKinsey and Co1, put the global challenge of reducing carbon emissions on a par with the level of economic change arising from the industrial revolution … but needing to be achieved in a third of the time. McKinsey also notes that focusing global capital markets on dealing with the challenge would equate to diverting expenditure of 0.6 to1.4 percent of global GDP into emissions reduction and mitigation measures1. This type of assessment is driving some of the thinking that is emerging in economic interventions through systems such as emissions trading.
The Emissions Trading Scheme (ETS) is regarded by some as the most significant change to the New Zealand economy since the 1980s, so it’s not surprising it’s had a bumpy ride through the political process – with a few more bumps to come, probably. The ETS creates uncertainty and costs – and opportunities. In Hawke’s Bay with our heavy reliance on agriculture, it’s going to test our resilience and ability to adapt. Land use may change over time to a more integrated mix of farming and small-scale forestry, which may in turn create better environmental outcomes – soil retention and water quality. That, though, will only happen if the ETS creates new income streams for landowners.
Energy efficiency (or rather, lack of it due to poor housing insulation) is indirectly one of the most significant opportunities to reduce emissions globally and it has a local dimension. A potentially significant outcome of the political process in constructing the ETS is the Green Party’s influence on proposed government investment in housing insulation (potentially $1 billion according to various media commentary). Here in Hawke’s Bay some 67% of our housing stock was built before 1978 and therefore did not require insulation2. Damp cold housing is significant driver of health and social issues and even has some influence on poor air quality. Maybe a decent proportion of those funds might flow into our houses!
Climate change for New Zealand may actually increase agricultural productivity given warmer temperatures and increased rainfall. Canterbury and Southern/Central Hawke’s Bay look to be the exceptions, potentially suffering from declining rainfall.
So climate change impact on water is likely to be another high profile subject – not least in BayBuzz! An emergent trend is the increasing use of financial instruments to manage the many environmental effects. Traditionally governments have sought to regulate in managing environmental consequences. But as competition for resources speeds up, regulatory approaches, which rely on high degrees of certainty, become strained if they are the only mechanism for management. Whereas the pricing of carbon emissions seemingly appears to be the first such example, similar financial approaches might work for water management. Work over the past 15 years in Australia has looked at pricing “salinity credits” as a means to mitigate or reduce the degradation of inland waterways, and biodiversity credits have also been explored.
Turning the question back to water in our region, in the years ahead I believe a major challenge will be to ensure there is a very well-informed community able to work collaboratively on a number of initiatives including regulation, science, market instruments and infrastructural interventions. Arguably, anything less will result in a whole lot of conflict and a set of problems we’ll all share.
The second trend is demographic change. We often hear about the aging population in the Western World generally – and even here. A statistic I heard quoted anecdotally was that some 67 million people are due to retire from the European work force in just the two years 2016-17. Some of these retirees will be mobile. Such a large demographic shift will heighten the demand for talented people and may well impact on our work force in New Zealand, which is already highly mobile. By some accounts, we have approximately 600,000 to 1 million New Zealanders abroad that are eligible to vote, which suggests it already is an issue3. How do we tap the talent of our expatriates and the mobility of those who want what we can offer?
Another demographic trend has a strong local flavour. Currently Maori as an ethnic group are approximately 23% of our total population in Hawke’s Bay but projected to rise as a proportion of our population, possibly up to 30% within a generation. If I look back 20 years to the role and influence of Maoris in New Zealand, compare it to now, and then think forward another 20 years, it’s going to be an interesting time. This suggests that a prosperous Maori community is critically important for all of us and, therefore, so are the Treaty Settlements.
Hawke’s Bay is blessed with a warm and sunny climate. In global terms we are sparsely populated but have the fortune to live in an attractive area, and are increasingly easily connected with the world. It strikes me – as a recent migrant to Hawke’s Bay – that it’s crucial we understand the drivers of change, such as those identified above, and couple this understanding with a well-educated, innovative workforce and very good community relationships. If we do so, then trends and impacts that are often seen as negatives, especially to the status quo, can be in many instances be turned into positives.
CEO, HB Regional Council
1. The Carbon Productivity Challenge: Curbing climate change and sustaining economic growth, McKinsey & Company, June 2008
2. The Hawke’s Bay Healthy Housing Profile 2008, HB Healthy Housing Coalition (unpublished)
3. TVNZ One News, September 7, 2008