The business case for a green economy
Wed, 13 Jul 2011 4:00p.m.
Just one day after the launch of Pure Advantage – a collective of top New Zealand businessmen fostering support for a clean, green economy – the UN released a report showing a 32 percent spike in renewable energy investment globally in the last year.
The timing may have been coincidence but the message from these announcements last week is not.
The move to renewable energy is gaining momentum and New Zealand must quickly cement its spot or risk losing a potential economic head start.
Kiwi entrepreneur Nick Gerritsen has spent much of his career setting up “clean tech” companies and says the creation of Pure Advantage is a good sign.
“In a way it’s a bit of déjà vu for me because I’ve been working away for five years now on various companies in the sector, so it’s great to have that reassurance coming up behind us.”
He says the world is waking up to the economic benefits of clean technology, but warns New Zealand must not get left behind.
“The fact is, that this is actually now mainstream, it’s not fringe. And for a country like New Zealand we really have to be placing this as a priority.”
The move to mainstream means there will be big money to be made, but also that big countries will start to make aggressive moves in the sector.
The UN report shows New Zealand’s chief trade partner and emerging economic powerhouse China is showing clear signs of explosive growth in renewable energy.
China led the way in renewable energy investment last year spending US$48.9 billion, more than double that of its closest rival the United States. The investment by China was a 28 percent increase on the previous year and an obvious statement about its economic direction.
Perhaps too this is a sign these mega-economies are gearing up to wean themselves from a fossil fuel addiction, which sees them contribute nearly half of the greenhouse gasses that pervade the atmosphere.
And while renewable energy currently only makes up a mere five percent of global power generation, a 2009 Innovas report predicts the green global economy to be worth US$6.8 trillion by 2015.
Mr Gerritsen says in order for New Zealand to cash in on the green revolution, it must change its old-fashioned approach to agriculture and embrace innovation at every step.
“Dairy is great but it’s not going to provide a scale opportunity that is going to lift the economy into the space that we have to be at if we’re going to remain a first world country,” he says.
“I think some of the big companies are starting to look at innovation but there are gaping issues that they are starting to face.
“In terms of agriculture generally, the sort of big questions we need to be asking are whether perhaps New Zealand should take on an anti-nuclear thing and say we are going to go fully organic as an economy.”
He says New Zealand must also change its dated approach to energy production, in light of World Bank predictions that envisage crude oil will reach US$250 a barrel by 2020.
“We’ve had some conversations with the Ministry of Economic Development about it and their view is that ‘oh well, as crude oil goes up all companies are going to be hit evenly, so we’ve got this floating level of competitiveness’.”
Mr Gerritsen says the next decade will see New Zealand either blaze out a path of innovation or slump further in the economic rankings.
“So obviously the Pure Advantage guys and the work we’re doing is saying ‘actually we’re heading into a zone of extraordinary opportunity, but we actually have to act and the action has to broad it has to be dynamic’,” he says.
“Otherwise we’re going to slip into this miserable economic scenario where we basically lose our leverage.”
Mr Gerritsen says the move must come from the private sector and he praises business heavy-hitters Sir Stephen Tindall and Chris Liddell for setting up Pure Advantage.
He says the green movement must eventually involve the New Zealand Government, but it will only be successful once the market proves it to be profitable.
He says New Zealand is still weighed down by stale climate change debates.
Internationally, he says even oil companies like Shell are conceding that man-made climate change is a reality and New Zealand organisations with their head in the sand need to change their tune.
“If Shell is going to come out globally and say that the debate over climate change is over, then the Federated Farmers and those sorts of organisations in New Zealand really have to step up because they have got significant lobbying influence with the Government.”
But if the Federated Farmers ex-CEO Don Nicolson is anything to go by, ACT’s newest candidate and a well-known climate change sceptic, Mr Gerritsen and Pure Advantage’s vision for New Zealand’s green economy may face an uphill battle against prevailing opinion.
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24/08/2011 6:29:54 p.m.
How many of Gerritsen's so called green companies have produced anything worthwhile NONE. They are nothing more than a collection of fancy websites making ridiculous statements and claims and wasting precious research monies.
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