The impact of climate change on Air New Zealand and on New Sealant’s economic environment as whole Introduction Currently, climate change obtains increasing concerns from government and worldwide environmental organizations. In the meantime, climate change becomes a constraint and a challenge for economy. There are conflicts in interest between the reduction of industrial pressures on environment and the use of energy which not only create difficult problems and challenges for the government, but also bring uncertainty for business (Nazareth, 2010).
The green gas emission is one of the main factor in climate change that has a pep impact on economy and government’ economic policy. New Zealand government has put a lot of effort on dealing with climate change over the past year. A range of political parties in New Zealand have made commitments to reduce New Sealant’s emissions. Because the government’s movement and policy, New Zealand organizations are also facing the problems of making decisions about how they will respond to the changing economic situation caused by climate change (Bradley, 2009).
Air New Zealand is one of the biggest national organization and also face the same challenge with other New Zealand firms. This essay will first briefly review the emission condition in New Zealand followed by an analysis on the impact of climate change (emission) on New Sealant’s policy and economic environment as well as the impact on Air New Zealand. Climate change and emission in New Zealand The impact of climate change on New Zealand does not lie with the temperature or rainfall change (Kola & Hoffmann, 2007).
The agriculture industry may receive benefits from these changes in climate (Kiang Sharp, & Sheen, 2009). For example, the climate change may increase the agricultural productivity due to the warm weather, and increase the demand for certain odds (export of agricultural products) or services like snow fields. However, researchers predict that Australia may experience massive negative consequences on climate change which may reduce supply in lots of related industries (Kiang, et al. , 2009).
Because New Sealant’s economic largely rely on agriculture and service industries, and its geographical isolation to international market, New Zealand has an emissions-intensive economy (Kola & Hoffmann, 2007). Since the release of the second report of the international Panel on Climate Change (EPIC), the issue of climate change has been elevated to a high level. The report indicates the ramification of the impact climate change on global economy (Ministry of the environment, 201 1). It forced governments to have effective respond to make some changes.
New Sealant’s gross emissions Of CA were 59. 1 million tones in 1990 (Ministry of the environment, 2011). While the gross CA emissions were 70. 6 million tones equivalent to in 2009 of carbon dioxide which is higher than the total amount of emissions in 1990 (Ministry of the environment, 201 1). This big increase in green gas emission is largely caused by the increase in energy emissions from transport emission and electricity generation. The energy emissions from agriculture were also increased over three times since 1990. Ministry of the environment, 201 1) Currently, the emission from energy and agriculture are approximately in the same proportion. According to the Kyoto Protocol, New Zealand has to decrease the level of emission to ass’s emission amount within the commitment period otherwise the government need to pay for the excess amount (Ministry of the environment, 201 1). The net emission of New Zealand is lower than the assigned amount for 2008 and 2009 which do not need to purchase units offshore according to Kyoto protocol (Ministry of the environment, 201 1).
The impact of emission reduction on economy and Air New Zealand New Zealand has a proactive and strategic manner on climate change and emission control though its small size and isolated location in the world. But there is a great disparity on how New Zealand should implement the emissions reduction methods. The Evidence shows that a large gap exists between the concern on emission and the real actions (ASPIRE, 2011 More specifically, government and organizations are not willing to spend millions of dollars to made actual responds. The debate was mainly on whether New
Zealand organization and New Zealand residents needs to pay a lot for emission reduction and whether the reductions in New Zealand will bring us Bostonian consequence on global greenhouse gas emissions (Nolan & Crower, 2010). According to statistical data, 23. 4% of New Zealand residents agreed New Zealand should reduce emissions; 38% opposed that New Zealand has the responsibility to follow the global emissions trading regime because it will increase the cost of living; and only 18. 1 % agreed the emission reduction plan of New Zealand even it may decrease the employment opportunity by 24. % (Nazareth, 2010). Due to the debate on the cost-effectiveness of such plan, lots of research has been conducted to investigate the impact of climate change on New Sealant’s economy. There will be increasing cost on increased incidences of extreme weather like flooding and erosion in North Island, but it is unlikely to have long-term impact on productivity of the New Zealand economy itself. However, if the climate continues to deteriorate, it is likely to have negative effects on the New Zealand economy since there will be increasing pressure on agricultural sector.
Also the negative impact on other countries may influence the demand and affect New Sealant’s industry. Air New Zealand is the national airline of New Zealand which originated in 1940 (Air New Zealand, 2011). Under European Union’s provision, Air New Zealand with the other thousands of airlines must follow the instruction of the European union’s emission trading scheme by 201 2 otherwise it will face penalties if Air New Zealand needs to keep its business in Europe (Air New Zealand, 201 1).
According to European Union’s emission trading scheme, 4000 airlines including Air New Zealand must submit an effective plan to reduce the emissions by January 2010. It is required to reduce the emissions of aviation by 3% based on the emission level in 2005 by 201 2, and 5% by 201 3 (Air New Zealand, 2011 European Union’s emission reduction policy has received criticism by the International Air Transport Association because it is not logical to penalizes non-EX. airlines (ASPIRE, 2011).
According to the announcement of Air New Sealant’s chief executive Rob Fife, following the provision of European union would inevitably bring a financial burden for the airline and passengers (Bradley, 2009). It was difficult to predict how much the airline needs to pay for the emission reduction cause it involves a lot of technological and strategic change on management. The financial payment of the airline will increase; as a result the price of flight ticket will increase as well. The customers will pay extra fee on emission reduction plan.
There is a potential to reduce passengers’ demand for travel (Bradley, 2009). In order to change the negative impact of the emission reduction on the business, Air New Zealand has adapted its strategic plan to meet the provision of European Union. It has invested approximate 4 billion New Zealand dollars to investigate new Boeing 787-9 and 777-300 ERE aircraft (Air New Zealand, 201 1). It aims to make the youngest and most fuel efficient aviation for long distance transportation in the world in the following five years.
It also has invested around 5 million on its fuel savings plan and has reduced its CA emissions amount by 100,000 tones (Air New Zealand, 2011). It put more effort on reduce the weight of aircraft and load more precise fuel on aircraft which aims to reduce the usage of fuel and emission. Air New Zealand is also planning to provide passengers with the aerodynamic enhancement package on Boeing 777 aircraft, and fit winglets to the Boeing 67 to enable them to fly more economically (Air New Zealand, 2011 The emission reduction plan of Air New Zealand also bought financial benefits.
Accomplish with the reduction of 36 million liters fuel usage annually, Air New Zealand received approximately 43 million savings on fuel cost each year (Air New Zealand, 201 1). Because the negative effect of traditional fuel and its increasing price, Air New Zealand has invested million Of New Zealand dollars on investigating new and sustainable energy during four years (Air New Zealand, 201 1). These movements are all new for Air New Zealand and the ensconce and responses to deal with the climate change and the governments regulations.
At the beginning Air New Zealand spend extra more on the environment protection project, but the innovative and strategic plan also help Air New Zealand to save a huge amount of money and win the reputation in emission reduction. Conclusion In conclusion, the climate change affects the organization and economic environment in terms of changing policy, investment focus, and increasing budget on environment protection. Although the climate change and CA emission may bring benefits to New Sealant’s agricultural industry in a short ERM period, it will finally restrict the economic development.
The New Zealand government has promulgated policy related environment protection especially for emission reduction. It also has a huge investment on discovery of sustainable energy. The effort has made on the encouragement for firms to have more concern on environment. Air New Zealand has adapted its policy and management plan to reduce CA emission and fuel usage and have received significant rewards.