David Farrar: Meaningless data

Don Brash writes:

Successive New Zealand governments, as governments in many other countries, have adopted policies designed to discourage the emission of greenhouse gases, or to encourage measures which would absorb such gases. By far the most logical of these measures is the Emissions Trading System (ETS). Other policies, such as subsidies for electric vehicles, have no logic at all: if switching to electric vehicles were the lowest cost way of reducing emissions, the ETS would already be encouraging that switching without subsidies. And if it isn’t, the subsidies push us into higher cost ways of getting to Net Zero.

Yep, the ETS should be our major vehicle to reduce emissions.

But what of the greenhouse gases which banks themselves generate? With effect from this year, banks must report publicly on the greenhouse gases which their own operations generate – how much petrol they use, how much electricity, how many plane flights, how many car journeys, and so on. Well, calculating that is apparently not terribly hard, whatever you might think of the value of doing the calculation, and the small (in New Zealand) bank that I chair has just paid a consultancy some thousands of dollars to make that estimate for us.

Silly, but not to hard to do.

But as of next year we will need to report also the emissions which our lending activities create or make possible. And we paid the same consultancy some more thousands to do a rough estimate of that figure for a recent year.

This is absolutely nuts, and the sooner the new Government does away with the crazy law which requires such a meaningless calculation the better.

Meaningless? Well, how does one estimate the greenhouse gases involved in, say, a loan to help build a new motorway? I suppose it is possible (if meaningless) to estimate the greenhouse gases emitted in the construction of the motorway, but what about the effect of the traffic on the motorway? Is there more traffic created because the road makes travel much faster? Does the new route actually reduce the greenhouse gases generated by the traffic, perhaps because there is less stop-start traffic or a smoother gradient than on the older road which the motorway replaces?

Requiring banks to do this will just make money for consultants and produce meaningless data. Does anyone sane actually think the way to fight global warming is to have banks lend less money for people to buy houses etc?

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders.