The cost of the oil and gas ban

PEPANZ commissioned NZIER to analyse the possible benefits and costs of the Government’s decision to ban future oil and gas exploration. The report is here.

They have found that over 25 years:

• The ban will reduce real gross domestic product (GDP) by between $15 billion (3%) and $38 billion (7.4%). The medium scenario is a reduction of $28 billion (5.4%).
• Household consumption (the best measure of economic wellbeing and discretionary income) will reduce by between $7 billion (2.4%) and $20 billion (7%)
• Per household, this represents a $4,800 to $14,200 fall in consumption spending on average for each year between 2020 and 2050, with a $9,400 drop in the medium scenario.
• Export revenue will reduce by between $3 billion (1.6%) and $10 billion (5.2%).
• In Taranaki the ban will reduce real GDP by between 35% and 53%, or $16 billion and $40 billion, with a medium scenario of 46% (~$30 billion).

And will all this economic cost be worth it, for the environmental gain?

Well there is no environmental gain. The ban will increase global greenhouse gas emissions as the reduction in natural gas will see greater use of coal.