NZ Economic Resilience: Submission to the Productivity Commission – Focus on Global Catastrophic Risks

The New Zealand Government asked the Productivity Commission to undertake an inquiry into the resilience of the New Zealand economy to supply chain disruptions.

The major risks to New Zealand are those that arise elsewhere and impact the entire world.

Adapt Research and the Aotearoa NZ Catastrophe Resilience Project (NZCat) have made a detailed submission to this inquiry.

In the submission we propose that global catastrophic risks such as major volcanic eruption, extreme pandemic, great power war, nuclear war, asteroid/comet impact, major solar flare, etc are the greatest threats and any resilience planning should consider these scenarios, which collectively are not unlikely.

The most severe common impact across these scenarios for NZ is an extreme collapse in global trade.

We made 12 recommendations in our submission:

1. Include global catastrophic risks in National Risk Assessments.
2. Replicate the 2022 US Global Catastrophic Risk Management Act.
3. Prepare strategies and plans to ensure food security under circumstances of global catastrophe and/or trade isolation.
4. Conduct interagency/multi-sector scenario-based simulation to explore the impact and response of New Zealand to major global catastrophes.
5. Red-team the above exercises and include scenarios where New Zealand is isolated from global trade for an extended period.
6. Introduce a new National Science Mission to study global catastrophes.
7. Conduct analysis of risk and response, provide data and information that industries and communities can use to make decisions about adaptation.
8. Support industries and communities to produce commodities that local export markets (eg, Australia) will likely need, to hedge against the collapse of long-distance trade.
9. Develop a plan to keep domestic and local regional trade and supply operating.
10. Nurture a global catastrophic risk think tank based in New Zealand.
11. Undertake rapid cost-effectiveness analyses across a suite of potential mitigation measures.
12. Ensure that the above analysis is conducted at national level, but also identifies regional variation in capabilities and needs.