It’s time to speed up investment in the big projects that will kick-start the green economy and create good jobs.
Responding to the challenge of climate change is an opportunity to shift New Zealand’s economy onto a cleaner path. The Green Infrastructure Fund will help fund transformative projects that move New Zealand towards a carbon-neutral economy by 2050.
In our first term of Government, the Green Party will:
- Establish a government-owned, independent, for profit Green Infrastructure Fund with a social and environmental purpose, to act as a magnet attracting private finance to transformational low carbon, climate resilient projects.
- The Fund will kick-start new clean infrastructure projects like solar and wind power installations, energy efficient buildings, biofuels, and other clean technologies.
- The Fund will have a minimum target rate of return of 7 percent, an annual emissions reduction goal of one million tonnes of CO2, and generate thousands of new jobs.
- It will cost $110 million over three years to be initially paid for by raising oil royalty rates from 46 percent to the international average rate of 70 percent.
In time, the Fund will see billions of dollars of (mainly) private sector finance funding new renewable energy plants, solar panel installations, energy efficiency retrofits, the development and production of significant volumes of biofuels, and other clean technology projects.
Similar green investment funds and banks can be found in Europe, Australia, Japan, Malaysia, and the United Arab Emirates. Six states of America — California, New York, Hawaii, New Jersey, Rhode Island, and Connecticut — have newly established green banks. With the help of green banks and funds, these countries are achieving greater economic prosperity while at the same time reducing their contribution to climate change. New Zealand can too.
How does it work?
- The government kick-starts the Green Investment Fund with an initial injection of $100 million.
- The government investment acts as a magnet to attract other private investors, such as pension and Kiwisaver funds, iwi, and other long-term investors. Overseas, similar funds have raised up to $10 for every $1 of government contribution.
- The Fund provides finance or equity to organisations that have strong plans to build infrastructure or other projects that help to reduce New Zealand’s contribution to climate change.
- A project gets funded and built.
- Over time, the organisation that built the project pays back the Green Infrastructure Fund or the Fund’s stake in the project gets sold off for a profit.
More information (PDFs)
Green Party Infrastructure Fund Policy
Green Party Infrastructure Fund two-pager
Green Party Infrastructure brochure
Pretty simple, pretty solid. This is going to lead to inevitable questions about avoiding dud investments, (screen them, and accept that losing out on a few investments still leaves room for profit like in any other infrastructure fund) but overall part of a sound strategy, especially if combined with things like a carbon tax.
‘ Carbon neutral ‘ ?
Hmmm… when they got back an alleged alien description of what constitutes the basic building blocks for them it was supposed to be silicone based… is this what they have in mind?
🙂
I really do wish that they’d all read The Entrepreneurial State by Mariana Mazzucato. It shows them how this sort of shit needs to be done if we want to develop our economy.
This investment fund should become and R&D fund focussed upon sustainable energy research that researches sustainable energy and the factories to produce it. Probably worth building the factories as well.
That research then becomes publicly available so that private enterprise run with it although, IMO, this isn’t something that private enterprise is going to improve.
The end result is that the economy develops and we start producing high value stuff.
Any reason they can’t do both? I haven’t read the full policy yet, but I’m assuming that this Fund isn’t primarily an R and D fund. It’s basically a way to get business and organisations to transition quickly by providing finance. Govt should be doing R and D as well.
Doing both is probably a good idea but even then it should be under a single government department set up to look into these things, to provide guidance and funding.
If by “guidance” you mean the kind of stuff that comes out of MBIE, for example, I’d run a mile.
I’m thinking more along the lines of NASA.
I’m not familiar with NASA (not at all my area); could you please briefly expand on this?
The more important question is how it would fit in the current NZ R & D culture & infrastructure, if there’s such a thing?
We have the technology,nasa has the lucre
http://www.victoria.ac.nz/news/2017/06/wellington-scientists-getting-hybrid-planes-off-the-ground
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Nice story, thank you.
About the only name that rings a bell is Jeff Tallon who, among many other things, used to (?) write good pieces for the NZ Herald.
We could have the lucre as well if the government made it available. That’s a large part of the problem – the government simply spend doesn’t enough on our R&D.
NASA has the brief for aeronautics and space research and development. This is their guide and they use it to choose ideas to research that may help with that. Those ideas can come from anywhere when NASA asks for methods to produce a specific outcome: Private corporations, public institutions and themselves. When they get an idea they discuss it and then, if chosen, fund it until failure or completion. The funding will go to where the idea came from so if it came from a private corporation then they’ll get funding to do the research for it.
They develop the manufacturing techniques as well.
The research that they do is then publicly available for anybody, anywhere to use for any purpose including foreign countries and businesses.
The Entrepreneurial State by Mariana Mazzucato is a book that is well worth reading.
NZ does have a system but it seems complicated and inefficient compared to the US system. We seem to do piecemeal research that doesn’t have a defined goal and so we fail to produce end products as well. The process to get funding is excessively bureaucratic (the government not wanting to spend money results in a lack of R&D as the scientists end up spending as much time filling in applications as doing actual research) and a general lack of funding anyway (The amount of funding that our government makes available for research is pitiful).
How to get it to fit is another question that I don’t have an answer to as I really don’t have enough knowledge of it. From what I’ve heard the present system should simply be thrown out and replaced.
The first part about NASA was informative, thank you. I found more info on the NASA website. [Where else? Duh!]
The second part I wholeheartedly agree with. The ‘ecosystem’ of state-funded R & D here in NZ is risk-averse and timid & fragile and not surprisingly this has led to a corresponding culture of inertia.
The Government produces many consultation and discussion documents – these are good documents per se – but without exception fails to take next step; it’s a never-ending talk-fest. For example: http://www.mbie.govt.nz/info-services/science-innovation/national-statement-science-investment
In this environment throwing more Tax Payers’ money at it would just be a waste IMHO but obviously the sector is hopelessly underfunded here in NZ, not just by OECD standards but also and more so by outcomes. No wonder that many of the ‘success stories’ move off-shore.
Science does not know boundaries and ought to benefit the whole of mankind. Due to its relatively remote location New Zealand must invest (!) more in (the) weightless economy.
I also checked out the book you recommend and I might indeed read it.
Nice to see policy with some vision and exactly the kind of thing that could help make a difference to one the greatest threats to the future existence of the human race as we know it.
Would be good if more time was given to discussing proposals like this in the main stream media instead of spaghetti pizzas, Trump handshake fails and Winston’s smoking habbit.
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This setting up of a
Green Investment Bank“fund” seems an awfully neoliberal way to be going about things. Essentially, this policy details a ritualistic ceremony in which devotees pray to the “The Market” for “transformational low carbon, climate resilient projects” to deliver us from evil. Its all just so much bullshit and jellybeans.The policy is also bad politics. First off, it plays to a Green Party weakness. The MSM long ago colluded with National Ltd™ to manufacture a seemingly permanent and near universal perception that the Greens are the least suitable of all political parties to be talking economics and finance. Secondly, its not new. There’s a few semantic tweaks but, just like last time, Bill English will have no trouble in dismissing it as silly and unnecessary. And thirdly, the idea doesn’t actually do anything in the real world about mitigating climate change. It’s just another boutique funding mechanism, might as well have a great big lolly scramble for lawyers and bankers.
Here’s an idea: ring-fence wind/solar/biofuel activities; create $5 billion by fiat and only spend that money developing and managing those activities; set up a government department to manage this function nationally; employ managers to manage, scientists to work on improving existing technologies, and workers to commence construction/manufacture of existing products and new ones as they come on line, and infrastructure. All infrastructure and manufacturing facilities developed will be owned by the public, as will any profits and savings. Of course, that’s provided the neoliberals don’t privatise them.
Pretty sure that any left wing govt formed in 2017 is going to be working within a neoliberal framework initially. Best that can happen is get a strong Green presence in a Labour-led govt and then work on getting them to shift towards social democracy.
I don’t think the policy is as bad as you make out. From what I can tell they want to get as many businesses and organisations converted to low carbon as soon as possible, and across the board. They tried something similar with solar back in the day, where govt money would be used to kick start the industry, getting enough businesses up and running and then the price would start coming down and thus the industry is established. I can’t see the problem with that tbh (other than they were prevented politically from doing that).
How is transitioning NZ off fossil fuels not part of the global move to reduce carbon emissions?
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Transitioning NZ off fossil fuels is a part of the global move to reduce carbon emissions. I never said it wasn’t. What I said is that the proposed green fund doesn’t help do that, it just clips the ticket.
If the desired policy outcome is to provide the motivation, products, and infrastructure required to speed this along, the government would be best to do the job itself, especially since this is an urgent matter of national security. There are plenty of existing levers which can be pulled to move business away from carbon use, taxation being, perhaps, the most obvious and motivational. A better policy, IMO, would be advocating for that, and anything immediately practical – even something like an extension of the powers and functions of DoC. But a new/old speculative funding mechanism? Really?
Its a tough one for the Green Party, though. Climate change is the most important issue currently facing the country, yet most New Zealander voters, by far, don’t believe it. How do you cut through that, especially when the perpetual MSM/ government narrative is implied denial? And, yeah, true: not helping is that neoliberalism is ubiquitous in New Zealand society, especially in the economic and political realms. Its been running rampant for more than a whole generation. Despite its monstrous, grotesque results, Its now the “accepted truth”.
Perhaps a vivid cut-through might be some stark “for the many, not the few” social justice policies. Labour could call for the return of compulsory union membership while the Green Party could call for the immediate occupation of Auckland’s 40,000 “ghost houses”. The benefits would be immediate, widespread, and lasting. But, yeah, s’pose, best not frighten the punters out in punterland.
I like the idea of the fund.
The questions I would like to put to Mr Shaw are:
– What is the role of EECA, and the Electricity Commission, in this funds’ administration?
– What is the role of the governments’ 51% interest in electricity generation companies in this fund?
– How much income from oil royalties is forecast – both from the effects of the new much higher tax, and from the collapse in oil exploration world-wide?
– What is the role of NZTA in the change to renewables? Or Kiwirail?
– What is the role of NZSuper Guardians in this fund?
– Other than the stated rate of return, what are the benchmarks for success of the fund?
– Is the taxpayer liable if the fund is bankrupted?