The 2020 Budget left $20 billion to be allocated for future investment. How should the Government invest the remaining $20 billion?

The Government should invest in projects that address New Zealand’s most pressing intergenerational challenges: Inequality, climate change, and infrastructure. Projects that solve these challenges are not mutally exclusive, and as such projects should be selected that combat each of the challenges. Projects that combat intergenerational challenges and provide future wellbeing are also not mutually exclusive with present wellbeing projects; evidence shows that green investment delivers more jobs than traditional infrastructure.

There is an opportunity for the Government to invest the $20 billion in a way that creates a wellbeing-focused economy, meaning that the economy supports a flourishing social foundation and a healthy planet. So what projects could this involve? Three possibilities are:

  • Renewable and decentralised energy
  • Regenerative and distributive farming
  • The circular economy. 

These ideas will each be considered in this three-part series. This article looks into renewable and decentralised energy.

Renewable energy comes from natural sources, such as sunlight, wind, and water. This makes up 40 percent of New Zealand’s energy use (and 80 percent of our electricity). The remaining 60 percent mostly comes from fossil fuels: coal, oil and gas. 

Achieving net zero emissions of greenhouse gases by 2050 requires removing fossil fuels from our economy. Light vehicles, manufacturing industries, construction, freight, public transport, etc. need to be powered by 100 percent renewable energy instead. 

In 2018, the energy sector accounted for 41 percent of New Zealand’s gross greenhouse gas emissions. The Climate Change Response (Zero Carbon) Act sets a target for New Zealand to reduce net emissions of all greenhouse gases (except biogenic methane) to zero by 2050. Achieving this requires removing fossil fuels from our economy. Light vehicles, manufacturing industries, construction, frieght, public transport, etc. need to be powered by 100 percent renewable energy instead. Moving towards 100 percent renewable energy requires significant investment in renewable energy infrastructure and technologies. This could involve various projects, a few of which are highlighted below.

Transport electrification is pivotal to enable low-carbon mobility. Light vehicles, freight, public transport etc. need to be electrified. This alone requires substantial investment in the equipment and systems that electrified transport requires (i.e. the infrastructure).

It may also involve investing in large-scale wind and solar farms. However, there are already a number of wind farm projects underway. Instead the Government could provide significant funding to communities to reduce power poverty by ensuring that renewable energy is accessible: energy democracy. According to Community Energy Network, energy democracy is “the idea that New Zealand can shift from a centralised, top-down provision of energy to one that prioritises deep engagement and local decision-making for communities to literally ‘own’ their energy network.”

In practice, energy democracy could take various forms, but whatever approach is taken, it is fundamental that it honours Te Tiriti o Waitangi. Māori need to be decision makers, and have self-determination of their own enegry projects. Government could fund iwi, local councils or other community entities to implement projects that enable the community to produce their own renewable energy (in a manner that suits the local context). One possible approach is that the Government funds small-scale renewables infrastructure and community smart grids, so that households can generate their own power and use smart grids for peer to peer electricity trading. Lessons can be learnt from the numerous international examples, such as the recent creation of the first Indigenous-owned solar power farm in Canada.

Another important aspect of energy is that buildings should be energy efficient. It is widely accepted that houses in New Zealand were not built for our climate, and that this needs to change. Our current housing stock requires renovations and retrofits, involving improved insulation and heating. It is necessary that new builds are green, digital and climate safe, especially the 8,000 new houses announced in the Budget. The Budget’s green projects should not be siloed; it is important that each project in the Budget is implemented in a green and climate friendly way.

The 2020 Budget was a jobs and training budget, rightly so. But it is important that the jobs and training opportunities are of the twenty-first century.

The 2020 Budget was a jobs and training budget, rightly so. But it is important that the jobs and training opportunities are of the twenty-first century. Failing to invest in future ready training, skills, and jobs would be a disservice to New Zealanders, as it may lock people into careers that are not future proof. It also would fail to build capablity and capacity in jobs of the future. The projects and ideas discussed in this article would provide substantial training or employment in future proof jobs, such as renewable energy upskilling, community energy upskilling, and climate safe houses upksilling.

Funding the initiatives outlined above would be a substantial step towards our 2050 emissions target, but for the investment to be truly transformational requires structural change to the systems that govern our lives. It may be hard to understand how this issue is interconnected with energy. As mentioned, the Government should invest in projects that address inequality, climate change, and our infrastructure deficit. Our current systems have led to inequalities, so what is needed is not only increased funding to address these inequalities, but also to change the system to prevent further perpetuation of inequalities. These changes may include constitutional reform, institutional reform, legislative changes, tax reforms, and welfare reforms. But what is important is that the values, ideas, and knowledge that underpin the systems reflect all New Zealanders.

Investing in renewable and decentralised energy in a way that honours Te Tiriti o Waitangi would create meaningful markets and employment, meaningful because it supports a flourishing social foundation and a healthy planet. But to ensure the investment is transformational requires changes to the systems that govern our lives.

Watch this space for the next article on regenerative and distributive farming.