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Insights 44: 20 November 2020
NZ Herald: Matt Burgess discusses why the Decarbonising Fund will have no impact on NZ's emissions
 
Freely Speaking Podcast: Is this the end of the fiat money system?
 
Dominion Post: Eric Crampton unpacks the case for a better Covid-19 leave policy

Itís the emissions, stupid!
Matt Burgess | Senior Economist | matt.burgess@nzinitiative.org.nz
The Government has declared a climate crisis, so there should be no room for bad emissions policies. But you could drive a bus through the Government’s current strategy and processes on climate.

Under the Paris Agreement, New Zealand must reduce greenhouse gas emissions to 30% below 2005 levels by 2030. By 2050, net emissions – gross emissions minus offsets such as planting trees – must reach zero.

This precision makes it uncomfortably clear how difficult these targets will be.

New Zealand’s reliance on its primary sector will make the road to net zero especially challenging. The country will simply run out of money long before the destination if it spends too much to cut too few emissions. Effective policies are essential.

Unfortunately, that is not how the Government sees things.

As far as we know, none of the Government’s emissions policies make any real difference. That is because nobody has checked. This week, the Ministry for the Environment, in response to Official Information Act requests, revealed how many policies have been tested for their actual effects on emissions in the last five years. That number is zero.

This says a lot about how seriously the Government takes climate change. The Government has more data on the price of haircuts than on the effectiveness of its emissions policies.

Harder things are already being measured. For example, the Ministry of Social Development measures the dollar value of early support for people on benefits. And Pharmac knows how many dollars it takes for each drug to add one year of life.

Yet the Government has taken on the impossibly difficult task of choosing where and how to cut emissions without the systems it needs to make good decisions. Inevitably, as bad policies like 100% renewable electricity lead to missed targets, Kiwis will be called on to do more, always more. Climate change is the party you can never leave.

Ministers and senior officials declare New Zealand needs “climate action.” It is “urgent,” they say. Actually, New Zealand needs lower emissions. That is what the text of this country’s legislation and international agreements say.

And the problem is not urgency, but that policymakers do not understand that the task is to find the shortest path to lower emissions. Only robust and disciplined analysis will reveal the way.

To graduation and beyond
Joel Hernandez | Policy Analyst | joel.hernandez@nzinitiative.org.nz
All around the country Kiwi students are in the thick of their long-awaited NCEA exams. Many of which will now have a new appreciation for the immense value of schooling – particularly after being locked out for several weeks this year.

School is more than cheap day-care. They are places where teachers prepare young Kiwis for life. They are where teachers and principals pass down cultural and social values. And where kids gain life-long friends and learn to socialise with those different to themselves. Schools are where students learn powerful knowledge that enable them to flourish in work, study or simply in their passions.

Some of these outcomes have been easier to measure than others. Educators and parents both want kids to be happy, culturally sensitive and productive members of society. But getting reliable data on how schools are helping to reach these aspirations can be difficult if not impossible.

That’s where key innovations in data management come in.

Introduced in the report In Fairness to Our Schools: Better measures for better outcomes, the Initiative’s school performance tool is the first of its kind in New Zealand and the world. Using socioeconomic data on more than 400,000 students over 500 schools, the tool can fairly evaluate every secondary school in the country regardless of decile.

Located in Statistics New Zealand’s Integrated Data Infrastructure (IDI), the tool uses information from not only the Ministry of Education but also the Ministry of Social Development, Inland Revenue, Oranga Tamariki, New Zealand Police and the Department of Corrections.

The tool then compares school performance beyond just academic outcomes. Upcoming research will reveal how schools are performing in preparing young Kiwis for life after graduation in addition to how they have performed in NCEA.

So, what might this project reveal?

Previous research uncovered that on average there is no NCEA performance difference between decile one and decile ten schools after the tool accounted for the communities each school serves.

This upcoming research will show if this is the same case when we compare schools on the employment, training and later-life outcomes of their students.

Are schools that perform well in NCEA the same schools that perform well in preparing their kids for employment and future study? The tool will help answer this question.

If New Zealand cares about equity and equal opportunity in education, then it is imperative to use the wealth of government data to get the most out of schools.

Thatís not how this works
Nathan Smith | Chief Editor | nathan.smith@nzinitiative.org.nz
Analogies are fun, but good luck using them to change someone’s mind.

I’ve heard plenty of conservatives in the US (and everywhere else) say the economy is like a household and the president is like a CEO.

The household analogy is simple: the government must live within its means. But what is true for a household is not necessarily true for a government. For instance, if a household cuts spending by 10%, it will have a negligible effect on the wider economy. But I don’t need to tell you what would happen if a government cut spending by 10%.

Yet what really rustles my jimmies is the president-as-CEO analogy. It is head-shakingly bad. Do they not know that a CEO gets the final say on budget, personnel and strategy?

While it’s a bit different in a Westminster system, a US president has access to none of these. In fact, the US government would run perfectly well if the White House was just a house.

The thing is, the Executive Branch in the US doesn’t execute much at all. When a department does something silly, which branch does it testify before? A State Department official isn’t called to the White House to explain herself. She is called to Congress. In other words, the Legislative Branch manages the Executive with little things called “laws.”

It wasn’t always this way. Back in FDR’s days, the Executive was much more powerful, and maybe then the president was like a CEO. But no longer.

So, forget about the CEO analogy. It isn’t convincing.

Donald Trump says he wants to bring US troops back from Afghanistan before he leaves. He’s having a bit of trouble. But since he’s the commander in chief, it should be his decision, right?

Well, during the Nixon presidency, Congress passed the Impoundment Control Act 1974. This law says while the president can get funds for a plan, it is illegal for him to refuse to spend the appropriated money on that plan. So, if having troops in Afghanistan costs money, but Trump doesn’t want them there, the law says the expensive troops must stay in Afghanistan.

For any conservatives reading this, I offer a replacement analogy.

Imagine if your business was run by 435 CEOs. And the way they run this company is by outlawing some things and not others. Does that sound like a business? Of course not. It’s a government. They’re completely different things.

But, like I said, this probably won’t change anyone’s mind.
 
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