Thinking about the future of Hawke’s Bay

Trend assessment or futures thinking is an increasingly important component of strategic planning. Work being undertaken by Environment Waikato and through the development of an economic strategy in the Greater Wellington region are two examples of its application in regional government.

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.

Andrew Newman
CEO, HB Regional Council

Footnotes:
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

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2 Comments

  1. Thinking about the future of Hawke’s Bay!

    Here we have a CEO, someone we are supposed to look up to, and by the fourth paragraph I have my doubts, especially when he espouses his so called facts on Global warming.

    I went to school over 50 years ago, and I was taught that the world was still coming out of what was known as the Second Ice Age. In other words, already, for some 20,000 years, the world has been getting warmer. Nothing created by man, just a natural phenomenon. So where was our CEO, asleep, or did they fail to teach that at his school.

    Then he states as a fact that 90% World Climate Scientists are agreed that warming is happening at an increasing rate. I believe he is using very old data to substantiate that statistic. Whilst it may not be that high, I believe that there is a majority of those scientists now are not convinced this is as a result of mans (and womens) actions. It is political scare tactics to substantiate the imposition of a new tax on the populace, and an excuse for bureaucrats to expand their power.

    Having got that far through his dissertation, I have now lost interest in an obvious bias to substantiate the ‘establishments’ attitude and actions. The ETS, the Emission Taxation Scheme, reminds me of two things; the South Sea Bubble and the Tulip Scam, one Government backed, the other Market Forces, both of which ended in disaster. Isn’t that familiar in today’s Market forces, where, unless we have our life savings under the mattress, we are experiencing daily nightmares. Obviously, a great many people failed to pay attention during history lessons.

    I do agree with him, that Water is critical to our Region. Unfortunately, the HBRC Chairman refused to let me address the issue at a Council meeting. It seems his is the ultimate and only knowledge on the subject.

    We are going to be throttled in development here in the Bay because of the shortage of water. I have already suggested that we need to start discussions with all the appropriate people, Councils and Maori, with a view to piping water to the Bay from Lake Taupo. With just a few hills to climb, basically it is downhill, so with minimal assistance it could be piped here. It’s nothing new, look at Auckland, taking water from the Waikato, at Meremere. We need to think outside the square and actually start to negotiate with those involved, not just beat our gums, moan about pollution of what we have, and talk of limiting use of local resources. I repeat, this is going to strangle the development of population growth as well as what we produce best, wine and horticultural products.

    Mr CEO, you came from Private Industry, put that hat back on and take the necessary steps to move this Region forward to become the vanguard of development in New Zealand.

    Sincerely,

    Philip M Ward

  2. What has happened to reasoned debate? All media regurgitate the CO2 scenario in that same breath as Climate Change, just as many quote Al Gore. Al Gore – a highly skilled Politician and entertainer, certainly not a Scientist of any colour.

    Do we hear anything about the opposing view – not unless one searches uTube for "The Great Global warming Swindle" or "Exposed – The Climate of Fear"

    Consider:

    95% of Greenhouse gasses are water vapour.

    Volcanoes, Animals, Decaying matter and the Ocean all contribute producing the majority of the CO2 therefore Human caused CO2 is a small part of total CO2

    NZ is 4 million of Earth's 6,670 million people – we are a 0.0006 PART of a small fraction of the man made CO2 caused problem.

    Thus:

    NZ's man made carbon footprint in world terms is extremely small, and who gave us the mandate to show the world how to reduce emissions

    There is only political posturing, but no scientific agreement as to a linkage by which CO2 caused the current 0.7C warming trend over the last 100 years but of course no one wants to hear that.

    Carbon credits will only be a means to extract more Tax from us to allow the government to employ more bureaucrats to study the problem.

    Wake up everybody – reduce your own CO2 footprint and more importantly; get off the Bandwagon.

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