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Green Tech Provides Real Opportunities for High Value Growth in NZ

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The late Sir Paul Callaghan – an entrepreneurial kiwi, world-leading scientist, and Rutherford Medal awardee, said in 2011 that New Zealand chooses to be poor because we don’t focus on leveraging our high-value innovation. Nothing brings his insight into sharper focus than a recent steep drop in commodity prices, as our hard working farmers start feeling the effects of volume competition and exchange rate driven export market whimsy. Fonterra dropped its payout forecast for 2014-15 to an eight year low of $4.70/kg of milk solids. That’s nearly half of the previous season, and indicates an almighty drop of over $6.5 billion in farmer revenue – something all kiwis will ultimately be affected by.

Coupled with this is the increasing sense that New Zealand, and certainly the rest of the world, is beginning to recognise serious environmental and natural resource constraints. Some gloomy statistics include our planet already being committed to 4-6oC of warming by 2100, 50% of humanity will be exposed to water scarcity by 2050, we are making deserts out of productive land at a rate of 12.4 million hectares per annum, and the sustainable catch of fisheries is being exceeded by 100 billion tonnes. Probably worst of all species extinction is now 1,000 times greater than natural rates.

Locally, New Zealand’s per capita carbon emissions are among the highest in the world, our native biodiversity is severely threatened and freshwater quality is still in decline. Our trading partners are beginning to notice – New Zealand has plummeted down the ranks of well-respected international surveys such as the Yale Environmental Performance Index; from 1st place in 2006, to 16th in 2014.

Your opinion on climate change doesn’t even matter any more – it’s what our trading partners think that matters.

Without a heaving financial services sector or strategically positioned trade logistics hub, New Zealand relies on its purity and untouched environment to underpin its international market reputation as a safe and clean food producer – our biggest earner. We don’t want to damage that reputation, nor do we want to be committed to commodity-driven growth. We need to hedge ourselves for the future.

The positive news is that it’s not only possible for New Zealand to develop high-value technologies that leverage our existing competencies such as agriculture, it’s also possible to deliver positive environmental outcomes at the same time. This pool of innovation is variously known as ‘cleantech’ or ‘green technology’. Cleantech is not fictional, nor is it a bubble – it’s a market response to real world market conditions. Cleantech touches every industry, from renewable energy generation, to the substitution of toxic chemicals in goods, energy and water efficiency measures, electric vehicles, biotechnologies, waste processing – the list is infinite. Global investment in cleantech has risen from USD$500m in 2001 to more than USD$300 billion in 2013 (Bloomberg). A compelling growth statistic in anyone’s measure!

So what clean technologies does New Zealand have to offer the world? Quite a bit, actually. Sustained taxpayer investment in science and innovation, coupled with a plucky determination for developing niche technologies has yielded a treasure trove.

A great example is a company called Pacific Rubber – a sustainable producer of high quality recycled rubber, based in Takanini. Their technology creates crumb and buffing products, which are used in civil construction, synthetic sports fields, landscaping, mats, non-slips pavements and raw material for adhesives and resins. The environment wins because the recycled material displaces other non-renewable materials and avoids further landfilling of waste.

Our Crown Research Institutes such as forestry experts Scion, have developed a huge pool of world-leading innovative green technologies such as (non-oil based) bio-plastics, municipal waste processing facilities and naturally derived nanofibre production.

But the commercial opportunities are not just limited to pointy-head scientists. Banks have also recognised the inherent benefits of growing their cleantech portfolio. Westpac is leading the charge with a serious focus on helping innovation-driven green companies and support for programmes such as the New Zealand Cleantech & Environment Network (NZCEN) www.nzcen.com

So what am I going to do about it? Well, building on the great thinking done by charitably funded green growth think tanks such as Pure Advantage, this year it’s my mission to upscale New Zealand’s high-value clean technology companies. Supported by some key players, we are going to set up a large-scale green investment scheme to find, fund and support New Zealand cleantech companies earning on the world stage. With a bit of luck we can help build New Zealand’s reputation as a high-tech, high-value, sustainable global citizen.

So, if you are interested in cleantech investment or have a green business opportunity you want to talk about, please get in touch: [email protected]

Duncan Stewart is a director of The Greenhouse – a company dedicated to growing New Zealand’s cleantech companies. He is a trustee of green growth business group Pure Advantage, a director of environmental management software company CS-VUE, a director of upstart social media and digital agency S&M, and a board member of Drive Electric Incorporated.

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