Balance and flexibility needed to meet environmental and economic goals

Responding to climate change is part of a broader challenge to achieve sustainable economic growth in a world of natural resource limits, Secretary to the Treasury John Whitehead said today.

Speaking at the World Environment Day Business Symposium in Auckland, Mr Whitehead said "Natural resource limits and the impacts of climate change are becoming increasingly important factors in how the Treasury develops its policy advice on economic growth. New Zealand is experiencing pressure on our natural resources such as water, and of course, our share of the atmosphere's ability to absorb greenhouse gases. The price of natural resource inputs to the economy is also rising."

"Our aim should be to achieve the best possible overall outcomes in terms of New Zealand's economic, social, environmental and cultural goals. We want to do our best to create an environment where businesses are free to pursue the opportunities that deliver sustainable economic growth in a world of natural resource limits, climate change risks and rising natural-resource prices."
Mr Whitehead cited an emissions trading scheme (ETS) as an effective and flexible approach to achieving environmental, economic and other goals. 

"An ETS represents a flexible and least-cost way of achieving the emissions target. Its design brings together economic, social, environmental and cultural factors.

"Clearly, there are difficult transition issues, and these have to be worked through carefully and well. But the more you avoid taking hard action, the less you can avoid even harder consequences. Some in business have argued that we should delay any action until the shape of the international response to climate change becomes clear.  In my view, it is better to respond to the challenge of reducing emissions early."

Water was highlighted as another serious sustainability issue faced by New Zealand.

"We have some major matters to grapple with regarding the use of our water resources. Water problems vary in degree and kind in different regions, but it is clear that use of water resources is approaching its limits," Mr Whitehead said.

"I believe New Zealand is up to the challenge of tackling big environmental issues like climate change and sustainable water use, and I believe New Zealand businesses are up to the challenge of thriving in a resource-constrained world. There are still enormous commercial opportunities within an environment of limited and increasingly scarce resources."

The full text of Mr Whitehead's speech at the World Environment Day Business Symposium is available on the Treasury website: http://www.treasury.govt.nz/publications/media-speeches/speeches/growthworldlimits.

ENDS