Sustainable future Institute_14july2010

Report on the State of New Zealand’s Future
Prepared by the Sustainable Future Institute, Wellington, New Zealand
For the World Future Society Conference, Boston, USA
By Wendy McGuinness, Lucy Foster and Jessica Prendergast
July 2010

What follows is work in progress for an upcoming Report titled The State of New
Zealand’s Future. This paper is part of a four-year work programme called Project
2058, which aims to develop a National Sustainable Development Strategy for New
Zealand. It takes a closer look at global drivers of change as they relate to the New
Zealand context. This aims to provide more clarity over the current state of New
Zealand’s long-term future.

In late 2008, this work programme led us to prepare four scenarios relating to New
Zealand’s future. The matrix method was adopted; the two axes represented the
quality of management of strengths, weaknesses, opportunities and threats by (i)
New Zealand and (ii) the world. The optimal and most desirable potential future was
clearly the one in which both New Zealand and the world were ‘well-managed’.
Notably, the other three scenarios show the inevitable negative ramifications for New
Zealand if either New Zealand and/or the world do not manage themselves well.

These scenarios indicate how significant global drivers may drive change in the
future. In total, 21 global drivers of change were found, which were further broken
down into 14 change agents and seven wild cards. We consider two types of change
agents exist; those that tend to initiate a crisis or a chain of events (primary) or those
that often produce change by responding to a primary change agent or wild card
(secondary). The inter-relationship between these sets of global drivers is reflected in
Figure 1.

Figure 1 Global Drivers of Change (SFI, 2008: 2)

Primary Secondary
Change Agents Change Agents
1. Climate change 8. Political systems and
2. Population and demographics institutions
3. Ecosystems and biodiversity 9. Economic models
4. Energy 10. Management of ecosystems
5. Resources and resources
6. Values and beliefs 11. Infrastructure
7. Justice and freedom 12. Security and conflict
13. Technology
Global Drivers of 14. Information, learning
Change and ideas

Wild Cards
15. Pandemic
16. Tsunami
17. Drought
18. Volcanoes and earthquakes
19. Astronomical events
20. Extreme weather
21. Terrorism, Biological and
chemical warfare

Our upcoming report considers these 21 global drivers in the context of 2010. Until its
release, please see the latest Project 2058 Methodology (SFI, 2009) and Report 6,
Four Possible Futures for New Zealand in 2058 for more information (SFI, 2008).

Below is a brief outline of obstacles and opportunities for each of the 21 global
drivers of change. Many of these obstacles and opportunities are not unique to New
Zealand, but are provided here to provide context for further discussion and
investigation. These drivers must either be addressed or used as tools to help New
Zealanders pursue our preferred future.

1. Climate change
Obstacle: Mitigating and adapting to climate change requires a unified global effort.
Achieving international consensus on what measures to take to reduce the impacts
of climate change is necessary but arduous. If climate change impacts are severe, of
concern for New Zealand is the need to adapt food production and manage
increased levels of immigration, particularly from low lying Pacific Island nations.
Opportunity: Climate change provides a moral imperative for the rapid adoption of
innovative technologies that reduce greenhouse gas emissions. As a small nation
New Zealand has the ability to rapidly adopt new technologies and techniques as
they become available. This ability could prove to be particularly helpful and
important in efforts to shift New Zealand’s energy production to 100% renewable
sources (see 4, energy below). The New Zealand Ministry for the Environment states
‘agriculture productivity is expected to increase in some areas but there is a risk of
drought and spreading pests and diseases’ (MfE, 2009). The climate is not expected
to change up and down the country but from east to west, rather, the west coast is
expected to get wetter and the east coast dryer. Arguably, in the short term, with
more rain on the west coast dairy farmers will be happy, and with dryer conditions on
the east coast winegrowers will be happy. The impact of extreme weather is
discussed as a separate wild card below.

2. Population & demographics
Obstacle: Extensive population growth in developing countries is placing an
increased strain on world resources. In 2010 New Zealand’s population is just under
4.4 million, with just under 1 million living or travelling over seas – one of the largest
expatriate populations. By 2026 the ethnic population composition will remain
primarily of European descent (70%), Māori (16%), Asian (16%), and Pacific (10%)
(Note that people may identify as belonging to more than one ethnic group so total
adds to over 100%). Assuming New Zealand’s population does not increase
significantly due to climate change refugees; by 2026 we are expected to pass 5
million, growing to about 5.75 million by 2061 (Statistics NZ, 2009: series 5, 1). The
65+ age group in New Zealand is projected to increase from 12% in 2005 to 25% by
the late 2030’s. The size and shape of our service infrastructure will need to increase
and be revised to accommodate the growing demand for age care related services,
while being supported by a changing work force. Notably, the Māori, Pacific and
Asian populations are likely to remain younger than that of European descent,
resulting in a higher proportion of the workforce being made up of these ethnicities
(Statistics NZ, 2006: 1, 21).
Opportunity: As New Zealand’s population ages, we may experience declining
crime rates, increasing consumption and demand for heath care; and be better able
to offer full employment for the young.

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3. Ecosystems and biodiversity
Obstacle: Ecosystems and biodiversity are increasingly vulnerable to changing
patterns of resource use. Use of hazardous substances, the introduction of invasive
species and the possibility of harm arising from genetically modified organisms
(GMOs) all pose risks to our native biodiversity which New Zealand is dependent on
maintaining. Trends such as growing international trade, greater mobility and climate
change mean that New Zealand's border is becoming increasingly vulnerable to
pests and diseases (Biosecurity Council, 2003: 1). There are numerous examples
where flora and fauna introduced to New Zealand have become weeds and pests. In
addition, it is important to note that New Zealand is dependent on the quality of our
ecosystems. In 2003 60% of our exports and 20% of our GDP depended on primary
production (Biosecurity Council, 2003: 5).
Opportunity: As the last nation in the world to be discovered, New Zealand still
contains many areas which are relatively unspoiled, for example New Zealand’s large
exclusive economic zone, continental shelf and portion of Antarctica. New Zealand’s
ecosystem is unique and our biodiversity is of great value both nationally and
internationally. The opportunity is therefore to showcase and capitalise on our
ecosystem and biodiversity through revenue from sustainable tourism, produce and
technology.

4. Energy
Obstacle: From the peak oil crisis to developing alternative forms of energy
production, a stable energy supply is vital for our future. Figure 2 indicates that New
Zealand’s primary energy supply has grown substantially over the past 35 years,
almost doubling in total energy. For the most part this growth has occurred across
the range of energy supply options. Gas and geothermal have seen the greatest
growth whilst hydro has remained relatively static and the proportion supplied from
coal has shrunk. To understand this graph, footnotes provide definitions of key
terms.1,2

1
Petajoules (PJ) - The joule is the Système International (SI) derived unit of energy and
heat. A joule is the energy required to heat 1 millilitre of water by about a quarter
(0.239) of a degree Celsius. A PJ is 1015 (1,000,000,000,000,000) joules (B. Field, personal
communication, July 16, 2010).
2
Total Primary Energy Supply (TPES) - The amount of energy available for use in New
Zealand for energy transformation (i.e. for electricity generation) and end use (i.e.
combusting coal for heat). For all energy sources, total primary energy supply is
calculated as indigenous production, plus imports, less exports, less stock change, less
international transport (B. Field, personal communication, July 16, 2010).

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Figure 2: New Zealand’s Primary Energy Supply (Adapted from MED 2010: 11)

New Zealand Primary Energy Supply 1974 - 2009

800

700

600

500

Petajoules 400

300

200

100

0
1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007
Year

Hydro Geothermal Other Renewables Coal Oil Gas Waste Heat

Given the abundance of hydro, wind and tidal options afforded by our unique
geography, New Zealand might be able to transition to 100% renewable energy
within the medium term. Obstacles however exist: the continual growth in energy
demand, technological hurdles and an increasing scarcity of prime sites for wind and
hydro generation. Political will also remains an obstacle to the adoption of renewable
energy.
Opportunity: New Zealand has an opportunity to become a world leader in
renewable energy given the abundant natural resources available for the
development of renewable generation facilities. Through the adoption of new
renewable energy solutions, old dependencies on environmentally detrimental
energy sources can be broken. Notably, in 2007, then Prime Minister Helen Clark set
a target of 90% renewable energy by 2025 (Clark, 2007).

5. Resources
Obstacle: Recording and reporting on quality and quantity of resources requires a
long-term vision and work programme. Arguably New Zealand’s three year political
election cycle calls for short-term practices and policies. For example, huge
quantities of water are being used in our dairy and mining industries (MfE, 2006: ix;
Heiler, 2009). Internationally, it is thought that the production of 1 litre of milk is
estimated to require 1000 litres of water (Water Footprint Network, 2010). It would
therefore be useful to complete more research into the New Zealand experience,
such as; how much water does a New Zealand cow need to produce 1 litre of milk? A
report in progress, currently titled the State of New Zealand’s Resources indicates
there are significant gaps in data (SFI, In Press [c]).

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Opportunity: New Zealand’s range and abundance of resources has a large and
unique economic potential for trade that can be realised through effective sustainable
management of resources. Our natural resources also attract sightseers and outdoor
adventurers, increasing revenue from our tourism industry. Lastly, when including
New Zealand’s extensive economic zone and continental shelf, about 94%3 of New
Zealand is actually under the ocean. A recent report indicates this may be as high as
96% (IPS, 2010: 17). This fact, combined with New Zealand’s share of Antarctica,
provide unique opportunities for the sustainable use and preservation of these unique
resources.

6. Values & beliefs
Obstacle: New Zealand’s population will become increasingly ethnically diverse. By
2026, the Asian and Māori populations are each projected to make up around 16% of
New Zealand’s population, with the Pacific Island peoples reaching 10% (Statistics
NZ, 2010). Arguably, New Zealand’s race relations suffer from a lack of clarity over
the role of the Treaty of Waitangi within New Zealand’s constitution (SFI, 2010a).
Opportunity: New Zealanders generally share values around their natural resources,
parks and landscape. Diversity in ideas and opinions can encourage and enhance
tolerance and understanding while providing insights into alternative and improved
ways of living. New Zealand has distinct potential to improve and diversify its beliefs
and values by embracing ideas from its extensive Pacific population and growing
Asian community.

7. Justice & freedom
Obstacle: Internationally there is significant evidence that unequal societies have
higher levels of social problems such as poor health and violence. New Zealand has
alarmingly high levels of disparity, which are reflected in social indicators of mental
illness and unplanned teen pregnancies (Wilkinson & Pickett, 2009: 67, 125). High
levels of inequality are also known to impact on a vast array of other social issues
including: level of trust, mental illness (including drug and alcohol addiction), life
expectance and infant mortality, obesity, children’s educational performance,
teenage births, homicides, imprisonment rates and social mobility (Wilkinson &
Pickett, 2009). Table 1 below shows that New Zealand is 72nd in the Human
Development Index for Disparity of income (ratio of richest 10% to poorest 10%)
(UNDP, 2009).

3
See calculation on accompanying PowerPoint.

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Table 1: Benchmarking Human Development

Total Disparity of income Includes Includes
Human Development Includes (ratio of richest 10% RST expenditure GDP (per capita)
Index Education Index to poorest 10%) (% GDP)

(UNDP Human (UNDP Human (UNDP Human (UNDP Human (UNDP Human
Development Report, Development Report, Development Report, Development Report, Development Report,
2007/2008) 2007/2008) 2009) 2007/2008) 2007/2008)

1. Iceland (0.968) 1= Australia (0.993) 1. Azerbaijan(2.9) 1. Israel (4.46) 1. Luxembourg
(60 228)

3. Australia (0.962) 1= New Zealand 2. Japan (4.5) 20. Australia 16. Australia
(0.993) (1.70) (31 794)

16. United Kingdom 6. Norway (0.991) 34. India (8.6) 25. Russia(1.17) 27. UAE (25 514)
(0.946)

19. New Zealand 12. Iceland 72. New Zealand 26. New Zealand 28. New Zealand
(0.943) (0.978) (12.5) (1.16) (24 996)

20. Italy (0.941) 18. UK (0.970) 94. United States 27. Ukraine 29. Greece
(15.9) (1.16) (23 381)

177. Sierra Leone 177. Burkina Faso 142. Namibia 91. Peru (0.10) 174. Malawi
(0.336) (0.255) (106.6) (667)

Interestingly, New Zealand is one of three countries without a written, codified
constitution (SFI, 2010a), which may be considered an obstacle by some New
Zealanders and an opportunity to others.
Opportunity: A universal definition of individuals’ rights and responsibilities may not
be necessary in eliminating inequalities and the lack of such a definition in a codified
national constitution may instead increase our tolerance for diversity. New Zealand’s
history provides an opportunity for tolerance: we were one of the few countries
colonised with a vision of not replicating past class systems. Due to our relatively
small population and stable economy, we have greater ability to rapidly implement
social and economic policy that will reduce levels of inequality and increase social
cohesion.

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8. Political systems and institutions
Obstacle: New Zealand has been fortunate to have one of the oldest democracies,
however, since the signing of the Treaty of Waitangi in 1840, there have been
ongoing concerns about the Crown’s inability to settle past injustices (currently
Government hopes to complete the settlement process in 2014). This coupled with
New Zealand not having a written codified constitution and a short election cycle
locks New Zealanders into a three year planning cycle and creates obstacles to
effective representation and political harmony (SFI, 2010a).
Opportunity: New Zealand may have a unique opportunity in using the 2014
settlement date as a moral imperative to define the rights and responsibility of New
Zealanders in a written codified constitution.

9. Economic models
Obstacle: Current economic models seem unsustainable, heavily focused on growth
and consumption. Notably, although central government’s Crown Balance Sheet
shows low levels of public debt, the low savings rate of New Zealanders translates to
low investment rates and arguably restricts economic growth.
Opportunity: In the past, New Zealand has demonstrated its ability to rapidly
implement economic reform, and given the impetus, this could be repeated in order
to develop a more sustainable economic system. There is the potential for a growing
awareness of more genuine indicators of progress to be further developed.

10. Management of ecosystems and resources
Obstacle: The lack of information and knowledge to manage ecosystems and
resources sustainably and efficiently over time. The currently available data is
insufficient to benchmark progress or to track trends in an accurate and meaningful
way. Insufficient regulation and questions surrounding resource ownership are
barriers to the sustainable management of resources.
Opportunity: Although data quality remains an ongoing issue, New Zealand, as an
isolated island state with controlled borders, is in a favourable position to tightly
control the introduction of new and undesirable organisms. Furthermore, New
Zealand has the opportunity to maintain its GE free status (to date there are no
GMOs developed outdoors approved for commercial use) and to pursue organic
production, in effect supporting a clean, green national brand.

11. Infrastructure
Obstacle: Redesign and expansion of infrastructure requires significant funding.
New Zealand has a culture of private car ownership, a relatively low population size
and density, and not surprisingly, an unsophisticated public transport system. New
Zealand’s broadband network is aging and in 2006 New Zealand was ranked 21 out
of 30 OECD countries for percentage of households connected to broadband
(OECD, 2006). Electricity supply, rail and pipelines have also proved challenging in
recent years.
Opportunity: As tired infrastructure demands upgrading there is the opportunity to
make long-term decisions based on principles of sustainability and cost-effective
public/private partnerships for the public good. Growing awareness of resource
pressures will encourage more efficient use of resources in future infrastructure
developments. The concentration of commercial activity in our three major cities
(Auckland, Wellington and Christchurch), eases the challenges associated with a
broadband upgrade by allowing focus upon relatively small geographical areas.

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12. Security & conflict
Obstacle: An inability to reach consensus on issues and governance primarily by
self interest inhibits the global community from taking action for the public good. New
Zealand’s relatively small population and economy suggests that national decisions
will be made to ensure alignment with and protection by our international allies. As
resource pressures continue to grow the risk of conflict increase.
Opportunity: New Zealand has the ability to effectively manage domestic conflicts
before they erupt, and to be (despite our size) proactive in the international arena
with regard to humanitarian interests in security and conflict. In the Pacific region in
particular, we have the potential to contribute positively to building the capacity and
stability of small island states.

13. Technology
Obstacle: Technological development may pose threats to our fragile social, political
and natural environment. New Zealand’s regulatory systems often fall behind the
commercialisation of new technologies, specifically biotechnologies (MoRST, 2003:
27 – 32).
Opportunity: Public good technology can greatly improve humanity’s outlook for the
future, particularly with regard to medical technology. Our Tin100 companies, the
largest technology companies in New Zealand, highlight our capacity and strength in
this field (Technology Investment Network, 2010).

14. Information, learning & ideas
Obstacle: New Zealand loses significant quantities of skilled workers and university
graduates to other countries with higher income levels (Statistics NZ, 2007).
Opportunity: New Zealand is actually gaining in numbers of skilled workers due to
immigration with an exchange, rather than a drain of skilled workers occurring
(Statistics NZ, 2007). All cultures will be enriched through an improved global
network, which allows for increased diffusion of ideas and generates positive
collective action. Our small population means that as a country we have an increased
ability to be receptive and to rapidly adopt and adapt to new ideas.

15. Pandemic
Current Situation: Like many countries, households in New Zealand are
inadequately prepared for the potential of becoming suddenly housebound for a
number of days or weeks. In 2008 a Statistics New Zealand survey found that only
15% of households met all the requirements for basic preparation (Statistics New
Zealand, 2008).
Opportunity: Our geographical isolation means that New Zealand has the ability to
quickly control its borders in the event of a pandemic. If this translates to a minimal
impact on New Zealand from a global pandemic then we would have the opportunity
to assist neighbouring countries. Should a pandemic strike, the funding and drive
behind the development of a vaccine or treatment will be accelerated, paving the way
for further medical innovation.

16. Tsunami
Current Situation: New Zealand has over 15,000km of coastline (New Zealand
Tourism Guide, n.d.), which is considerable given our small land area (266,200 sq
km) (New Zealand Tourism Board, n.d.). Numerous towns are situated on low-lying
coastal land and would require rapid evacuation to higher ground in the event of a
tsunami. Further, most of our major cities are built around harbours, increasing the
potential impact on our main centres in the event of a tsunami.

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Opportunity: Recent threats in coastal areas have demonstrated New Zealand’s
preparedness for this wildcard (TVNZ, 2009; Radio New Zealand, 2009). However,
although these threats did not amount to a serious event, they did provide an
opportunity to test our responsiveness, which clearly could be improved.

17. Drought
Current Situation: New Zealand’s economy is highly dependent upon agricultural
production, which relies on a steady input of freshwater. Should a prolonged drought
affect parts of New Zealand, the economic costs would be substantial. In addition, as
New Zealand generates approximately 60% of electricity from hydro stations (MED,
2006), an extended drought would result in an increase in demand for further
alternative fuels.
Opportunities: To reduce the negative impacts of severe drought affecting New
Zealand robust water management for agriculture and an increased range of
electricity generation options should be developed. Each of these options would
provide significant co-benefits to our agricultural and energy sectors even if severe
drought does not eventuate. Improved water management would reduce the
environmental impact of agriculture upon New Zealand rivers as a more natural water
level is maintained. Diversified electricity generation could, if used to support
renewable energy such as wind power, provide New Zealand with an effective way to
reduce greenhouse gas emissions.

18. Volcanoes and earthquakes
Current Situation: Like Japan and other Pacific nations, New Zealand has been
formed by activity along tectonic plates. Although responsible for creating much of
the landscape of the country, volcanic eruptions and earthquakes are destructive to
society when they occur. The position of Wellington over a fault line, Auckland over a
volcanic field and the potential for earthquakes to create flow on hazards such as
tsunamis places New Zealand at risk.
Opportunity: Faced with the risk of earthquakes in its major cities, New Zealand has
led the way in developing earthquake proofing technologies for buildings. These have
provided commercial returns through the export of the technology to other
earthquake prone areas like Japan (Leung-Wai and Nana, 2004: 2).

19. Astronomical events
Current Situation: The world faces the possibility of being struck by a meteor. The
potential for harm for New Zealand arises from either a direct impact or the effects of
a large impact elsewhere in the world. Developing an appropriate civil defence
response for a meteor impact is inherently difficult due to the high number of
variables and very low frequency with which such impacts occur.
Opportunity: Reducing the impact of a meteor requires significant advanced
warning. New Zealand is positioned in the Southern Hemisphere, an area with fewer
ground based observatories than the Northern Hemisphere. New Zealand has
particularly low levels of light pollution (such as in Tekapo, where the Mount John
University Observatory is located (Earth and Sky, n.d.). These factors combine to
make the country a valuable location for the development of a ground based
observatory to detect and track potentially dangerous objects. Astronomical science
in this country could benefit from the development of infrastructure and expertise for
this purpose.

20. Extreme weather
Current Situation: In extreme weather events New Zealand’s remoteness becomes
even more pronounced. The transport infrastructure linking our major cities is
insufficient in the face of unusually high levels of precipitation and other extreme
weather events. This is particularly prevalent in the South Island.

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Opportunity: Extreme weather events provide the opportunity to adapt
infrastructure to reduce future potential damage from similar events. Better public
education and warning systems could be implemented, along with enhancing road
and rail infrastructure.

21. Terrorism, biological and chemical warfare
Current Situation: The possibility of terrorism affecting New Zealand is sometimes
dismissed given our small size and isolation. Despite this, incidents such as the
bombing of the Rainbow Warrior, and the Bali and Mumbai terrorist acts, show New
Zealand and New Zealanders are not immune to terrorism. New Zealand is reliant on
international partnerships for defence; in the face of a sudden and immediate threat
of biological or chemical warfare there will be a waiting period before foreign defence
and aid can reach us.
Opportunity: Due to our geographical isolation we can quickly control our borders in
the event of a potential terrorist threat. Our current political situation, highlighted by
our first place ranking in the 2010 Global Peace Index (Institute for Economics and
Peace, 2010), reduces New Zealand from imminent threat of terrorism and enables
us to act as peacekeepers on the global stage.

To conclude, while the types of global change agents are unlikely to vary over time,
how they interact and evolve will lead to new obstacles and opportunities. Hence it is
critical to regularly review this terrain in order to identify weak signals and innovative
solutions to complex problems. Lastly, this is the view of the Institute at this point of
time, based on preliminary research. It is our intention to continue to scan the
landscape, as there is a great deal to learn before completing Project 2058.

Note: This paper should be read along side the PowerPoint accompanying this
presentation (see www.sustainablefuture.info).

Contact Details:

Sustainable Future Institute
P O Box 24222
Wellington
New Zealand
Email: wmcg@sustainablefuture.info
Phone: (04) 4998888

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