Agribusiness, GM and climate change

[Address to Agribusiness and Food Congress, Christchurch Convention Centre]

I hope you haven’t yet had your fill of climate change and genetic modification today, because that’s what I’m going to talk about.

At a conference subtitled “Grappling with Goliaths” I’m not sure I have much choice. Ducking those two would be like going to Auckland and forgetting to moan about the traffic.

My collection of ministerial portfolios means I am deeply involved with the Government’s work on both issues.

As Minister of Research, Science and Technology I have been up to my neck in the GM debate in recent weeks. As Convenor of the Ministerial Group on Climate Change I am up to my eyeballs in that issue much of the time.

First, because the news is hot off the press, I want to talk about genetic modification.

You will be aware that the Government announced its response to the Royal Commission report this afternoon.

I can say without hesitation that I think it is a good result for New Zealand.

Reactions have been mixed, of course. But New Zealanders, no matter what their position on this issue, should realise that this country is ahead of a great many others in having had this debate at all.

In many nations genetic modification has become a significant part of research activity and agribusiness without people having any such opportunity for a well-informed nationwide discussion.

Nature, the world’s premier journal of scientific research, made this point in a rare full-page editorial on the Royal Commission in August.

It noted that the commission’s scope and processes were unique, that it was a model of community consultation and scientific rigour, and that its report deserved an international readership.

Genetic modification is an area of science that advanced with such speed it left public opinion and understanding behind. With the Royal Commission process New Zealand has made a determined assault on that gap between the science and the people.

I don’t claim that the gap has vanished. There is still a great deal of misunderstanding and misinformation around. But it has narrowed.

As with all risk management, the GM debate has been about finding the right balance between caution and progress.

The Royal Commission’s report explicitly rejected the two extremes of a completely GM-free New Zealand and the unrestricted use of GM technologies. So did most of the major participants in the debate, including the Green Party.

An extensive public opinion survey by the commission indicated that New Zealanders tend not to have extreme views on the issue. What emerged instead was a rather discerning approach.

On one hand, New Zealanders did not want GM technologies to be loosely regulated — and in particular they wanted to be able to avoid GM food if they wanted to. Conversely they were equally clear that GM provided opportunities that should be explored.

A one-line summary might be: “We oppose GM doing things to us and support GM doing things for us”.

The commission decided that New Zealand should preserve its opportunities in respect of GM.

It said we would be unwise to turn our backs on the potential advantages, but we should proceed carefully and implement genetic modification selectively and cautiously.

The commission also examined the existing laws and institutions dealing with GM technologies and concluded that they were basically sound, although some improvements should be made.

An example concerned the institutional capacity to deal with ethical issues, particularly those raised by Maori. To deal with these the commission recommended the creation of new body, the Bioethics Council, Toi Te Taiao.

The Government has endorsed the vast majority of the Royal Commission's findings. We agree that New Zealand should preserve its opportunities and proceed with caution. But we have come to different conclusions on implementation.

The Royal Commission recommendations included significant further research and policy analysis. But the commission did not advise the Government to constrain the release of genetically modified material pending the completion of that work. Instead it advised us to call in the first GM crop application. That recommendation we have rejected.

The Government has decided instead on a two year constraint period on release. Exemptions will be allowed for medical or veterinary medicines or vaccines.

The existing emergency provisions of the Hazardous Substances and New Organisms Act will also apply, which means emergency exemptions will be possible for matters of national significance. An example would be an application for release of a GM vaccine for a serious disease outbreak.

This two-year constraint period will allow time for the further research and institutional fine-tuning the Royal Commission recommended.

The work includes establishing or continuing research addressing social, economic, ethical, environmental and agricultural questions identified by the Royal Commission.

It includes amendments to the HSNO Act and related legislation, and regulations and the establishment of a Bioethics Council.

It includes the completion of work on the economic impacts of a GM crop release on the strategy of "preserving opportunities".

And it includes the completion of work on other issues flagged by the commission for further investigation, such as conditional release, liability issues and managing the coexistence of GM organisms with others in primary production.

That’s a fair amount to get through in two years — but we are confident it can be done.

At the end of that period we will have an updated and extended framework for the management of GM research and organisms. Applications for contained research or release will still be handled by the Environmental Risk Management Authority, within that improved framework.

Meanwhile research in containment will continue, be it in a laboratory, a field or a glasshouse. The only difference is that the destruction or removal of all heritable material at the conclusion of the research — a currently optional condition that ERMA has universally applied — will be required by law.

As I said earlier, I am satisfied that this approach is in New Zealand’s best interests.

Our economy is founded on primary production. GM technologies are already a valuable tool for the primary sector in the continual quest for improved products and productivity.

I don’t know of any existing or immediately prospective research in New Zealand that will not be able to proceed within the constraints announced today. I am confident that New Zealand will keep its competitive edge as a developer of high-quality biotechnology and biomedical research.

But we have met the concerns of many ordinary New Zealanders. We will manage the risks of GM technology cautiously and well. We will, as the Royal Commission recommended, preserve our options.

I want to move on now, as promised, to that other global Goliath New Zealand must grapple with … climate change.

Many of you are probably aware that the Government has begun a nationwide public consultation process on New Zealand’s response to climate change.

Just over a week ago I released a consultation document and supporting material for distribution around the country. It is designed to give New Zealanders the information they need to offer an informed view on the Government’s intention to ratify the Kyoto Protocol in September next year.

We are making a determined effort to give business and the public the opportunity to make sure their views are heard and considered.

Personally I am very keen to raise the debate above the narrow sectoral interests and misinformation that have dogged it so far. The issues are complex and very wide-ranging. If we are to act in the national interest we must take the broad view, not get bogged down by attempts to advance the interests of some sectors, industries, or firms at the expense of others.

The results of the consultation process will inform the development of legislation needed for ratification of the protocol. We expect to introduce this to Parliament by the middle of next year.

Later, a second Bill will set out domestic policy to help New Zealand meet its obligations. This will follow a second round of public consultation on the Government’s preferred policy package, which is due to be decided by next March.

That’s the programme. But what I really want to impress on you are the opportunities the Kyoto Protocol presents – and the risks for New Zealand if we turn our backs on it.

It should be obvious to agribusiness, above any other sector of the economy … that global warming is something that New Zealand, above any other developed nation, must respond to seriously.

The evidence that humans are causing global warming by digging up fossil fuels and setting fire to them has piled up steadily and overwhelmingly, and continues to build.

Doing nothing would mean sleepwalking into the climate change hazards that are already being identified. For a country as dependent on primary production as this one, that would be nothing short of negligence. No other country in the developed world relies on agriculture for its wealth as much as we do.

The expected impacts of climate change on New Zealand include: drier conditions in the eastern part of the country, as we have now; a risk of more frequent extreme events such as floods and droughts; rising sea levels, with increased risk of erosion and saltwater intrusion; and biosecurity threats from the spread of warmer climate pests and diseases.

We’ve had some powerful reminders in this country recently about the economic costs of drought – in the electricity industry as well as farming.

New Zealand contributes very little, on a global scale, to climate change. But we suffer the consequences more than many other developed nations. Isolationism in these circumstances can only cost us dearly.

The answer to the question that many people put to me – “why move so soon?” – is that in fact we have wasted far too much time already.

Primary sector processing is typically energy-intensive. We take a lot of water out of milk. We cook a lot of wood fibre and freeze a lot of animals and fish.

But although New Zealand is as dependent on energy as other developed economies we are, sadly, less efficient with it than many of our competitors. We will only get further behind if they respond to climate change by improving the efficiency of their energy use still further, while we do not.

How we deal with climate change will be emblematic of how we improve our position and role in the world economy. It will be an important part of the way New Zealand integrates the concept of sustainable development into our economy and society.

The commercial opportunities that will arise from addressing climate change will be a significant new part of the New Zealand business scene.

There will be increased domestic and international demand for climate-friendly, higher-technology products and services. And there will be demand for products and services to prepare for or mitigate the impacts of climate change.

Smart people in agribusiness are onto this already, of course.

To pick on a firm that’s closely involved with this conference, Wrightson has identified business opportunities in providing solutions for farmers wanting to reduce their energy use or carbon dioxide “footprint”. With Genesis Research, Wrightson is also investigating pasture grasses that offer prospects of reducing methane emissions from stock, and it has put itself forward as a carbon pool manager for forest owners if we move into domestic trading in sink credits.

In my view, reducing ruminant methane is a very significant commercial opportunity for New Zealand. Because of the likely link between reduced methane and improved food conversion efficiency, the environmental gain is coupled with a productivity gain.

The potential benefits are large. Yet our research effort so far is light. I increased public funding in the last Budget but the private sector has yet to step forward.

Time is running out. The first Kyoto commitment period begins little more than six years from now.

Internationally, business is taking sustainability more seriously. The New Zealand Business Council for Sustainable Development is reflecting that here.

The Government will be working with the council to investigate the business opportunities arising from the protocol. That is also a central part of our consultation process. We are looking for a policy environment for Kyoto that works for New Zealand businesses, not against them.

Of course alongside the opportunities are the costs incurred by putting a price on carbon, and the uncertainty around that price.

Kyoto presents many uncertainties and some of them will be persistent and considerable. Other countries, businesses and individuals are getting used to this fact when it comes to climate change. New Zealand must get used to it too.

The question is: What mechanisms best help us to deal with uncertainty?

Clearly research and development will be crucial. So will contingency planning. So will an inclusive and transparent policy development process.

Big questions about climate change risks and policy consequences will stay with us for a long time. The price of carbon will not be discovered until international trading is under way. That price will have a fundamental impact on the economics of responding to climate change, and will itself change as the years turn into decades.

But we can start out with practical policy solutions — ones that address growth in emissions, use wisely the benefits of our Kyoto forests, recognise and deal with the impacts of the principal measures we put in place, and create or enhance opportunities for New Zealand business.

What won't help is doing nothing. "Wait and see" is not a strategy.

New Zealand is too small to make the Protocol come into force, or to stop it. It will come into force for us when it comes into force for everyone else, when enough countries have ratified. We need to anticipate it rather than pretend we can let it roll past us. History has shown often enough that the only effect of delaying a response to an environmental problem is to increase the cost of addressing it.

That is why this Government is acting. We are taking a broad and long view of New Zealand's interests in responding to climate change and Kyoto – just as I believe we have done in responding to genetic modification. I urge others to do the same.