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Māori Impacts from the Emissions Trading Scheme: Detailed Analysis and Conclusions

Acknowledgements

Foreword

1 Introduction

2 Māori Contribution to New Zealand Greenhouse Gas Emissions

3 Māori Economic and Socioeconomic Position

4 Likely High-Level Generic Impacts of the ETS

5 Likely ETS Impacts on Māori – Absolute

6 Likely ETS Impacts on Māori – Relative to Non-Māori

7 Summary of Findings

1 Introduction

1.1 Purpose of report

This report provides an analysis of the likely impacts of the Government’s proposed emissions trading scheme (ETS) on Māori. It also considers how the ETS might affect Māori differently from non-Māori. Both positive and negative effects are considered. It takes the basic details of the proposed ETS as read, and so does not repeat them here. The purpose of this report is to inform the consultation process that the Government is undertaking with Māori in relation to the ETS, and ultimately to inform the finalisation of climate change policy by the Government.

This report does not consider a number of things. Notably, it does not address issues arising in relation to the ETS under the Treaty of Waitangi, instead focusing on the ownership and use of assets by Māori. It does not consider the impact of climate change itself on Māori, or the desirability of a climate change response by New Zealand. It does not consider the relative merits of climate change mitigation versus climate change adaptation. Nor does it critique the ETS, or debate alternatives to an ETS (such as a carbon tax), instead taking the ETS, as proposed, as given. Finally, the report does not attempt to define interests at an iwi level, instead considering national and (where possible) regional impacts.

Importantly, this report does not provide a comprehensive discussion of the likely absolute and relative impacts of the ETS on Māori. It has not been possible to prepare such a comprehensive analysis, not least because important ETS details such as how certain free allocations of New Zealand Units (NZUs) will be made within the agricultural sector, and how assistance to households to compensate for rising electricity prices, have not been announced. Furthermore, details such as carbon accounting methodologies, compliance regimes and ETS-related taxation are not yet finalised. Additionally, the timeline for the finalisation of ETS details has not permitted a more detailed examination of the scheme’s impacts.

The report is structured as follows:

• The balance of Section 1 describes the assumed Māori interests of relevance to the ETS impact assessment, and outlines methodology and data sources.

• Section 2 discusses simple measures of the relative contribution of Māori to New Zealand’s greenhouse gas emissions.

• Section 3 provides a snapshot of aspects of the economic and socioeconomic position of Māori.

• Section 4 sets out likely high-level and generic ETS impacts for various sectors relevant to consideration of the ETS’s impacts on Māori.

• Section 5 discusses the likely impacts of the ETS on Māori in absolute terms.

• Section 6 extends the Section 5 discussion by considering the ETS’s likely impacts on Māori relative to its impacts on non-Māori.

• Section 7 summarises the report’s findings.

1.2 Assumed Māori interests

This report acknowledges that Māori are keenly interested in the values of sustainability. Importantly, these values arise under three main heads – economic, social, and environmental. These, and other assumed Māori interests, are summarised below.

1.2.1 Economic sustainability

Economic sustainability and importantly the ability for Māori to participate fully in any/all related economic opportunities from the ETS emerged strongly as the most important key theme from the national series of Māori consultation hui. Sir Apirana Ngata believed that Māori success was dependent on Māori adaptation and flexibility. He did not see this as conflicting with the retention of Māori culture. Ngata’s famous proverb (whakatauki) to a young Māori child reflects his counsel on the importance of Māori pursuit of economic advancement alongside other core value drivers:

“Grow tender shoot for the days of your world

Turn your hand to the tool of the European for the well being of your body

Turn your heart to the treasures of your ancestors as a crown for your head

Give your soul unto God the author of all things”

1.2.2 Land sustainability

Māori land is so central to Māori cultural values, beliefs and identity many Māori consider it essential to retain Māori land as a distinct tenure system giving expression to the whanaungatanga of whanau and hapu ties between people and the land. Māori land is “taonga tuku iho” or an inheritance to be passed from generation to generation. Further, it is not the mere passing of the title that is significant, rather it is the network of turangawaewae links that the land ownership represents that are to be maintained:¹

“Ko te whenua te waiu mo nga uri whakatipu”

(the land will provide sustenance for future generations)

1.2.3 Cultural sustainability – people

Given the historical and cultural ties Māori have with particular regions, Māori are assumed to have a greater interest in preserving the economic viability of their assets within those regions. By so doing, Māori are assumed to be concerned with sustaining their communities within those regions, and also the environment in which those communities live and operate.

He aha te mea nui o Te Ao, he tangata, he tangata, he tangata

What is the most important thing in the world?

It is people, it is people, it is people.

1.2.4 Other assumed Māori interests

Māori are also assumed to be interested with their ongoing ability to govern the management of their assets, and their ability to turn their assets to higher and better use, both now and as future new technologies allow.

Māori are further assumed to be interested in bearing only a fair, equitable and proportionate burden of the costs of climate change mitigation in New Zealand. In determining what constitutes a fair, equitable and proportionate burden Māori are assumed to be concerned with their level of economic development relative to non-Māori (as a consequence of past Crown actions or otherwise), as well as their relative contribution to New Zealand’s greenhouse gas emissions. Māori are also assumed to be keenly interested in the development opportunities that international emissions trading could offer.

More specifically, Māori are assumed to be interested in the impacts of the ETS on:

1. Māori household living costs – eg, in terms of likely ETS impacts on electricity and liquid fuel (and gas) prices, and hence on the prices of other goods and services affected by electricity and fuel prices
2. Māori employment prospects – eg, in terms of likely ETS impacts on sectors in which Māori employment is concentrated
3. the value, usability, riskiness, and return potential of Māori-owned assets – including assets acquired by Māori pursuant to Treaty settlements, or future such settlement assets
4. the preservation and protection of ancestral lands
5. the ability of Māori to govern the use of Māori-owned assets.

1.3 Methodology and data sources

This report compares the impact of the ETS on Māori against the counterfactual of no climate change policy. Clearly it can be argued that absent the ETS the Government will likely implement some form of climate change policy in the first Kyoto “commitment period” (CP1, being 2008–2012 inclusive), given its commitments and liabilities under the Kyoto Protocol. However, since such alternatives are likely to be more costly and/or less effective than an ETS-like mechanism, it is assumed that even an alternative suite of climate change policies will eventually need to converge on an ETS-like scheme. Hence, to provide a meaningful distinction between the ETS and status quo, the status quo is assumed to involve no emissions charge or carbon sink credit in the economy.

In assessing the economic impacts of the ETS on Māori this report shies away from referring to a unitary “Māori economy”, given that Māori interests – like non-Māori interests – will not be homogenous. Instead, to the extent that the available data permits, this report considers Māori economic interests at a disaggregated level, in an attempt to isolate where Māori economic interests might diverge under different aspects of the ETS. Thus, for example, Māori with predominantly forestry interests might experience different ETS impacts from Māori with predominantly fishing or agricultural interests. Moreover, Māori with mostly pre-1990 forestry interests might experience different ETS impacts from those with mostly post-1989 forestry interests. Similarly, among Māori with forestry interests, those with mostly exotic forestry interests might experience different impacts from those with mostly indigenous forestry interests.

While preparing this report it was identified that certain key sectors and certain regions account for the bulk of Māori economic interests. This remained broadly true whether Māori land uses and economic interests were measured in terms of land areas or dollar values, with the key exceptions being the major urban centres (in which the value of Māori economic interests is less tied to owning large areas of land). As it happens, the regions with the largest Māori land interests are also those with a higher Māori share of population than the national average. Accordingly, analysis in this report has been directed mainly at the fishing, forestry, farming and geothermal energy sectors, since they account for most of the Māori economic base, as well as significant shares of Māori employment. Moreover, focus has also been directed at the six regions with the largest Māori land interests by area (and relative Māori populations) – in decreasing order they are Waikato, Hawke’s Bay, Gisborne, Manawatu-Wanganui, Bay of Plenty and Northland. Finally, focusing on land areas rather than values may distort the actual importance of each land type to Māori. For example, if dairy farming per hectare is more valuable than sheep and beef farming per hectare, then the relative Māori interest in each farm type will be more balanced. For want of better data, analysis in this report proceeds on the basis of available land area figures.

While focusing on these sectors and regions will account for most of the value of Māori economic interests, it must be acknowledged that this should not understate the importance of ETS impacts in regions or sectors where Māori have more limited economic interests. For example, where Māori have limited economic interests as a consequence of having lost economic resources due to past Crown actions (as was particularly the case in the South Island), they may in fact suffer greater adverse ETS-related impacts by virtue of not being able to diversify those impacts across a wider asset base. Accordingly, there may be certain disproportionate Māori interests from the ETS – both positively and negatively – not highlighted in this report.

In preparing this report it has not generally been possible to produce original primary data. Instead, reliance has been placed on existing data, particularly:

1. “Māori economy” – Māori Economic Development: Te Ohanga Whanaketanga Māori, NZIER, 2003, and Māori Business and Economic Performance: A Summary Report, NZIER, September 2005
2. Māori land ownership institutions and statistics – Hui Taumata Māori Land Tenure Review Group: Discussion Paper, 23 June 2006, National Māori Land Information Project: Final Report, Land Information New Zealand, 2004, and Māori Land Administration: Client Service Performance of the Māori Land Court and the Māori Trustee, Report of the Controller and Auditor General, March 2004
3. Māori land-use details – Māori Perspectives on Kyoto Policy: Interim Results, Harmsworth G, Landcare Research, 2003, and Māori Land Analysis Version 1.1: Results by Region, MAF Policy,² December 2006³
4. Māori socioeconomic position – The Social Report: Indicators of Social Wellbeing in New Zealand, Ministry of Social Development, 2006, and The Net Worth of New Zealanders: A Report on their Assets and Debts, Statistics New Zealand, 2002
5. other Māori economic and socioeconomic indicators – Census data from Statistics New Zealand, as well as specialised data requests based on the Household Economic Survey, Statistics New Zealand, 2004.

Primary data has been obtained in discrete areas, typically based on direct approaches to Māori asset-owning bodies, and sometimes other bodies with access to industry data. Examples include holdings of pre-1990 Crown Forestry Licensed lands held by iwi pursuant to completed Treaty settlements, and fishing quota held by Māori (largely due to the 1992 “Sealords” deal).

Given the absence of comprehensive primary data and lack of time to comprehensively assess the data to hand, our analysis has been supplemented by discussions with a range of parties and organisations. These discussions have been directed at filling in data gaps as best as can be in the time available, and to gain perspectives from affected parties on how the ETS is likely to affect their interests.

Only limited, incomplete and sometimes contradictory or obviously deficient data is available on the nature and extent of Māori asset ownership. Of particular note is the understatement of Māori forest land ownership in certain key data sources, as well as the absence of published data detailing Māori and non-Māori interests in pre-1990 and post-1989 forests. The absence of such data weakens the conclusions that this analysis can reach regarding the ETS’s impacts on different Māori forestry interests. Accordingly, its conclusions will in many instances be indicative at best.

1.4 Key sectoral impacts and issues

Table 1.1 summarises the key sectoral impacts and issues identified in this report.

Table 1.1: Key ETS impacts on and issues for Māori (by sector)

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