The same considerations should apply from the perspective of NZ Inc (if you’ll please pardon that collective noun). The welfare system links wealth/income generators to net beneficiaries, making it rational for the former to care about the latter. Why then is no-one seriously investigating the links between social and economic policy?

In particular:

1. it would be nice to see the welfare working group (WWG) looking deeply into the reasons for underemployment, from both sides of the relevant markets. I’d expect a complete analysis to end up recommending a combination of sticks and carrots.
2. and what’s with these Auckland mayoral candidates? Notwithstanding the recent troubles in JohannesChurch,  Auckland surely has the most to lose from inequality-based social unrest, and the most to gain from including and upgrading the skills of poor Aucklanders. So why do none of the candidates even mention social issues, let alone the social/economic links?

Its a tax on young families struggling to make ends meet

Its a tax on retirees who watch every penny they spend

Its a tax on students huddling aroung a single bar heater in a Dunedin flat

Its a tax on everybody from a newborn infant to a funeral home

The ETS is a tax from the cradle to the grave

I wish it was a tax. That would have given business much more certainty than having to guess what the carbon price will be, and would therefore have stimulated the making of business decisions. Instead, the effort that should have gone into figuring out how to respond has been diverted into rent-seeking lobbying for special treatment.

But even though its not a tax, the point of the ETS is still to change behaviour. The reality is that NZ signed up to the deal, and that as a consequence we have liabilities (an unpleasant surprise). Now we need to pass those liabilities down to those of us who generate them. Otherwise we will just make things very much worse.

This is a new reality, faced by all Kiwis irrespective of their proximity to cradles/graves. Denial won’t work.

Farmers (me included) need to take a good look at the systems being sold to us. Why have Waikato dairy farms been losing soil carbon at the rate of 700kg/ha (Doesburg, NZH, 9/7/10)? Is it just possible that farming methods that put more emphasis on organic/biological issues could actually be more efficient overall? How confident are we that the agricultural business models that have already devastated Nauru are not going to get us in the end?

Maybe you have to be there, but from this distance, I just don’t get it. There seems to be a group of young people in ChCh who take pride in their cars and like to drive around the city in groups, admiring each other. OK, it probably seems weird to many of us, but what exactly is the social harm? I’ve had a reasonable hunt around for a problem definition, without success.

However the bylaw passed by the local Council prohibits “cruising” which is defined as

driving repeatedly in the same direction over the same section of a road in a motor vehicle in a manner that draws attention to the power or sound of the engine of the motor vehicle being driven or creates a convoy that is formed otherwise than in trade and impedes traffic flow.

I don’t see much legal distinction between the “boy racers” who are the target of the bylaw and ordinarly commuters, who also drive “repeatedly in the same direction over the same section of a road in a motor vehicle in a manner that… creates a convoy … and impedes traffic flow”. The caveat that the convoy be “formed otherwise than in trade” is hardly a distinguishing feature because there are surely commercial (trade) flow-ons from the cruising the bylaw is meant to target.

Anyway, this conduct (basically driving around city streets) doesn’t sound terribly naughty to me. Maybe some of the people doing it also break actual laws, but in that case the solution is surely to just enforce those laws.

I wonder how ChCh mayor (sideshow) Bob Parker interprets the fact that someone has now died during enforcement of the bylaw.

Chairman Henry is being quoted as telling the physical meetings that the company could come under “acute pressure” if this move is not taken. I agree.

Today’s vote (if positive) will mean that farmers exiting the co-op, for example to supply a competitive dairy factory, will have to sell their Fonterra shares back to other farmers. The co-op won’t be standing ready to buy them. Among other things, this will give Fonterra permanent share capital for the first time ever.

It will make the co-op much more sustainable, financially at least. There is still a fair way to go in persuading farmers that its actually in their interests to be environmentally sustainable as well, but more on that later.

Update: 90% of farmers voted yes.

was greeted politely and raised barely a ripple of anger. He was farewelled from the meeting with a standing ovation.

As a regular Straight Furrow reader, this surprised me.  Every week I read bleating & mooing from farmers about the ETS. And the Feds have until very recently been actively stoking these fires, along with ACT.

So how to read the warm reception for the PM that is visiting all this evil upon their homes, livelihoods and country? Did the Feds have no counter-arguments? Were they too polite to voice them? Or are they just resigned to the new reality?

Whatever. I support the ETS for agriculture. I hope the Feds get over themselves and focus on making NZ’s agriculture more sustainable. I especially hope the ETS helps us get the whole fertiliser/soil carbon nexus working properly and kick/manage our urea addiction.

• Bill Wilson, Supreme Court Judge;
• Expenses scandals; and now, incredibly urgent but totally out of the blue
• Cops on Councils!

Maybe I’m over-reacting, but the idea of a police political party seems just ever-so-slightly fascist to me. Won’t this make the Police a lobby group, rather than a dispassionate enforcers of the democratic public will?

My understanding is that at the national level civil servants are discouraged from standing for political office – if so, the same should apply at local government level.

I’m not sure I’m in Bomber’s camp on this, but he does make some pretty good points.

We’ve been down south, mainly offline for a couple of weeks, fencing, scrub cutting and chasing animals. Back to work now though and back to blogging too.

Upcoming topics:

• Agriculture in a carbon constrained world
• Transformation, productivity, 2025 etc
• and the usual eclectic mix

The Greenhouse Policy Coalition and Business NZ have both managed to make crucial errors in their attempts to play down the massive subsidy from taxpayers to large emitters that is embodied in the National/Maori version of the ETS. And the NZ Business Council for Sustainable Development has said nothing since reporting on 2 November that most Kiwis oppose the plan.

Fortunately, there are a few sane voices out there. Here are four:

Labour members of the Select Committee Considering the Bill:

The process adopted in respect of this bill is the worst that any of us have experienced in our time in Parliament.

…

The Treasury, the Parliamentary Commissioner for the Environment, our independent expert adviser, and the vast majority of submitters are critical of the bill. We uphold their criticisms. The bill significantly dilutes the effectiveness of the ETS, and will have a significant negative impact on the New Zealand economy and environment for many years to come. The bill ought not to proceed.

Simon Terry & Geoff Bertram: Taxpayers 84% Emitters 16%

Rod Oram: A costly exercise in hypocrisy

Brian Fallow: the ETS will cost our children

There has been a view that NZ should not seek to lead on climate change policy, but instead aim at being a “fast follower” so we don’t compromise our economy. I think this is poor economics. Apart from the deniers, we all expect relative prices to change in ways that reflect carbon (and other emission) constraints. The opportunity is to react now, so we have more time to get good at operating in that world.

$3 grand to send 100grams on a 45min round trip in a rocket.

Not a good look, Griffins is getting biscuits made in Fiji.

the analysis of industrial policy needs to focus less on the policy outcomes — which Rodrik argues are inherently unknowable ex ante — and more on getting the policy process right. In Rodrik’s words:

We need to worry about how we design a setting in which private and public actors come together to solve problems in the productive sphere, each side learning about the opportunities and constraints faced by the other, and not about whether the right tool for industrial policy is, say, directed credit or R&D subsidies or whether it is the steel industry that ought to be promoted or the software industry.

Rodrik’s central thesis is that industrial policy is a discovery process—one where firms and the government learn about underlying costs and opportunities and engage in strategic coordination. He is not ignorant of the risks of industry capture. On the contrary, he acknowledges that industrial policy is open to  corruption and rent-seeking. The natural response of (non-corrupt) bureaucrats is to insulate policymaking and implementation from private interests and to shield public officials from close interaction with business people. Rodrik’s argument is that this instinct to keep the private sector at arms-length is diametrically opposed to the need for bureaucrats to engage with business people in order to properly understand impediments to growth.

[From an MED paper released this week as part of the work of the financial markets taskforce. The Rodrik paper is supposed to be here (but it didn't work for me).]

I have long subscribed to the view that a solid grounding in the structure/practices/costs etc of an industry is essential for good policy decisions, so this rings very true. The difficult is that industry policy (whether inter- or intra-) generally has winners and losers. So the “come together” prescription is actually an invitation to a debate between opposing interests.

If policy makers could chair those debates effectively, which would include a clear separation between fact-finding and analysis, this could work very well. Thats a big if. But its worth a shot. And if you are an public official with the requisite bravery, I’d be happy to help.