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I argue that since governments cannot control climate-induced inflation, New Zealand is likely to see a succession of one-term governments. If the current government loses to Labour in the next election, it will be largely because it cannot reduce the cost of living.

For some time I have been asking myself whether inflation is becoming entrenched because of climate change. So I did some research.

One website talked about two new words -sogflation and heatflation. I think sogflation will apply to crops from our recent floods in the north of the south island. Heatflation certainly will apply to crops like soy beans coming from places under the USA’s heat dome and to crops like olives from Portugal and Spain in the summer of 2025, where temperatures are as high as 46 degrees Celsius.

Inflation, particularly in food prices, is increasingly entrenched due to the ongoing impacts of climate change on global agriculture. As extreme weather events—droughts, floods, and heatwaves—become more frequent and severe, crop failures are rising, directly reducing food supply and pushing prices higher.

Recent years offer clear examples. In 2023, drought in West Africa slashed cocoa yields, causing global prices to double within a year. Similarly, a prolonged drought in Spain devastated olive oil production, sending prices to all-time highs. In the US and Argentina, soybean harvests plummeted due to dry spells, resulting in sharp price increases. Meanwhile, excessive rain in northern Europe in 2023 left potato crops rotting in fields, driving prices up 158% compared to the previous year.

These price spikes are not isolated or temporary. The underlying climate pressures—rising temperatures, erratic rainfall, and more frequent crop diseases—persist year after year, making it less likely that prices will return to pre-failure levels. Each new failure compounds the last, as depleted stocks and reduced resilience in food systems mean that even a single bad harvest can trigger lasting inflationary effects.

As climate change continues to disrupt agriculture worldwide, the resulting inflation is unlikely to subside. Instead, higher food prices are set to become the new normal, embedding inflation more deeply into the global economy.

There is one problem. News articles talking about inflation rarely mention the impact of climate change or use the words crop failure. RNZ did this two months after Cyclone Gabrielle in New Zealand. The media has a lot to answer for. The exceptions are sites like this.

That is why the Reserve Bank of NZ and central banks all over the world will struggle.

Thank you for the opportunity to submit on this Bill. My name is Deirdre Kent and I am an 86 year old pakeha from Waikanae. I have 4 children and 13 grandchildren.

In your bill you write very seductive words:-

“Right to equality—everyone is equal before the law and is entitled to the equal protection and equal benefit of the law without discrimination. Everyone is entitled to the equal enjoyment of the same fundamental human rights without discrimination.”

 It sounds good but there are differences between the words ‘equality’ and ‘equity’.

I believe that politicians need to discriminate between the words ‘equality’ and the word ‘equity’. It is best illustrated in this cartoon:-

If we want everyone to be equal, then we need to find out where they are now and remedy any discrepancies. We want equal outcomes. In order to achieve equality we need to address equity issues. If a group starts with a barrier in front of them, then they need propping up.

What is Equity? The term “equity” refers to fairness and justice and is distinguished from equality: Whereas equality means providing the same to all, equity means recognizing that we do not all start from the same place and must acknowledge and make adjustments to imbalances.

While the terms equity and equality may sound similar, the implementation of one versus the other can lead to dramatically different outcomes for marginalized people. Equality means each individual or group of people is given the same resources or opportunities. Equity recognizes that each person has different circumstances and allocates the exact resources and opportunities needed to reach an equal outcome.

Equality means each individual or group of people is given the same resources or opportunities. Equity recognizes that each person has different circumstances and allocates the exact resources and opportunities needed to reach an equal outcome.

The need which Māori now have often arose out of the breach of the Treaty. It is wrong therefore to assume they are equal because it assumes there was no breach. The taking of land from Māori actually results  in the privileging of pakeha.

Māori statistics in health, incarceration, education and many other areas are lower than non- Māori. So as a group for historical reasons they should be given a helping hand.

Latest statistics have revealed a significant increase in families living in severe housing deprivation in Aotearoa since the last census.

Particularly alarming is a jump of 62% in people sleeping rough or in tents, boarding houses or marae.

Māori children and whānau are over-represented in these worsening housing deprivation statistics. Eg, Māori made up 84.0% of those experiencing severe housing deprivation in the Gisborne region, and 61.4% of those in the Northland region. Flowing from this will be poorer health, education, justice and other outcomes.

Environmental Reasons

The Treaty Principles Bill seeks to undermine Māori rights as partners of Te Tiriti, and one reason for that is Te Tiriti often stands in the way of corporations seeking to exploit the people, land and sea of Aotearoa.

Conclusion

This bill ignores the 184 years of breaches of the Treaty which have disadvantaged Māori.

My plea to you is to drop the Bill completely, as its proponents have not understood the difference between equal outcomes and equity and ignores history. It assumes you do not want equal outcomes.  

I am concerned that so few environmentalists understand the connection between the environment, resource depletion and the economy. 

The economy has a built-in growth imperative. The economy must either grow, or it collapses. Why does this happen? Because we allow the bulk of our money to be created by commercial banks as interest-bearing debt. (Even our own Reserve Bank has belatedly acknowledged this. In their article on money creation, they state, “The vast majority of money in circulation is created by commercial banks, through the process of bank lending”). 

Banks create the money to pay back the debt but they don’t create the interest. So when the debt is paid back with interest there is not enough money in the system to allow everyone to do this. Therefore someone must go into more debt. This has two effects: it widens the gap between rich and poor (net lenders and net borrowers) and it expands the total money supply. 

If you didn’t fully understand this first time, Bernard Lietaer spells out the story of the Eleventh Round here. An easy clear read.

And of course it means that banks have dangerous power over what is mined, grown or manufactured.

Nowadays with resource depletion of fossil fuels, it takes more energy to get energy. So we have progressively less net energy year on year available for the economy. Remember that economic growth and energy growth go hand in hand. There is a close correlation. So because we have less net energy, for the last few years there have been progressively lower rates of economic growth.

This in turn leads to desperation from right-wing politicians who want the economy to expand faster, no matter what the consequences. (And that is leading to far-right dictatorships becoming increasingly common.)

But can the global economic system known as capitalism be reformed?

Recently Ted Trainer published a 22p critique of the degrowth movement in which he argues that the answer is no. Capitalism can’t be reformed. It’s too hard.

This article changed my thinking. 

I know very few people like to explore the money supply part of the economic system, and that the very word “economics” tends to turn a great many people off. But academics here who are also environmentalists surely can understand this explanation. No equations are necessary, just the simple story of the Eleventh Round.

All this of course makes me very depressed. The actions of our change of government demonstrate this trend.

In July 2022 New Zealand inflation hit 7.3%.  It was worse in some other countries. Both US and UK were at 9.1%. In US 85% thought the economy is getting worse, a figure that should make us all think hard.

The usual solution to inflation is for the Reserve Bank to raise interest rates, but we will never win this way. Inflation is here to stay until we see the light regarding currencies. This at least will resolve food price inflation to some extent. Continue reading “Is there a solution to inflation?”