Tag: forestry

How Kiwi know-how can save the world

This a guest post by Kevin Cudby, the author of From Smoke To Mirrors, reviewed earlier this week by Bryan.

I started researching my new book, From Smoke to Mirrors, back in 2007. I had been following alternative energy stories, and I was inundated with blogs and press releases from hucksters peddling silly ideas that would do nothing but separate investors from their savings.

So, in late 2007 I set out to document the strengths, weaknesses, and costs of all the options. I kept in mind that hydrocarbon liquid fuels (petrol, diesel, jet fuel, and fuel oil) underpin key elements of human civilisation, such as food production and distribution. Although the relative importance of cars, trucks, aircraft, and tractors might change over time, it will only be possible to eliminate liquid-fuel-related greenhouse emissions if we can find practical alternatives for every vehicle and machine. Forty percent of New Zealand’s liquid fuel is used on non-road applications, so it would be pointless to fix road transport and ignore agriculture, construction, aviation, and all the other non-road liquid fuel users.

 

My engineering background helped me sort the practical options from the vacuous nonsense. It had been a while since I’d worked with battery technology, and I enjoyed ferreting out detailed technical information about the latest rechargeable batteries, information their promoters would rather keep secret. I learned, for example, that battery-powered farm tractors would be about as practical as concrete helicopters. Then I moved on to hydrogen fuel cell vehicles—which, from the practical perspective, are looking pretty good. But hydrogen tractors are almost as impractical as battery-burners.

We know about practical processes for converting softwood chips into electricity, hydrogen, hydrocarbon fuels, and ethanol

It is clear that energy forestry is New Zealand’s most practical option for hydrogen, and for hydrocarbon fuels. New Zealand scientists knew about this possibility way back in the 1970s, though the technology for making trees into fuel was still being developed. Now, we know about practical processes for converting softwood chips into electricity, hydrogen, hydrocarbon fuels, and ethanol. No matter which technology New Zealand uses for road transport, our energy forests would occupy pretty-much the same amount of land. Researchers have calculated that the “energy profit” (or EROEI) of fuels made from wood chips will be better than that of our existing fossil fuels.

Perhaps the most exciting discovery, for me, was that radiata pine forests offer so many environmental side-benefits. I knew from personal observation that the native undergrowth in a 25-year-old radiata forest is far more luxuriant than the undergrowth in a 25-year-old stand of regenerating kanuka. But I am not a biologist, so I had to listen to the experts. I learned that converting steep low-quality grazing land into energy forests would improve biodiversity by creating habitat for a wide range of native species, from fungi to kiwis and falcons (the bird, that is). And I learned that foresters do not use fertiliser, and that third-generation radiata forests in the Central North Island are doing as well, or better, than the original plantings.

It seems New Zealand foresters have invented a biomass production process that can operate indefinitely. The technique has been thoroughly proven over many decades of real-world practice. We can share this expertise with other countries, which means Kiwi know-how can help knock a very large dent in anthropogenic greenhouse emissions.

There’s an excellent chance New Zealand will have the world’s cheapest renewable petrol and diesel

Even more exciting, there’s an excellent chance New Zealand will have the world’s cheapest renewable petrol and diesel. I’m guessing many New Zealanders will be very excited about that, especially considering what I learned about the future of conventional cars and trucks. Talking to overseas engineers, I learned about simple, practical engine and transmission systems capable of more than halving the fuel consumption of conventional road vehicles, without downsizing them, and without relying on battery hybrid systems.
So, although renewable petrol and diesel will be somewhat more expensive than today’s fuels, the improved efficiency of future vehicles will more than compensate.

We can be almost certain that sometime between now and 2030, the global economy will hit serious problems with the supply of liquid fuels. That is because fuel supplies will increasingly come from synthetic fuel factories. It can take up to six years to design, build, and fully commission a synthetic fuel factory, regardless of whether it makes climate-neutral fuel, or fossil fuel. Multi-national energy companies will be able to maximise their profits by delaying construction of synthetic fuel factories until prices begin to skyrocket. We know this will happen, but we cannot say exactly when it will start to affect global fuel prices. A growing number of analysts think it will happen before 2030, and the real pessimists think it will happen before 2020.

However, by 2040, if New Zealand gets stuck in and builds the necessary infrastructure, we can reasonably expect freight costs, and vehicle running costs, to consume a smaller fraction of the family budget than they do today.

There is no sign of any practical alternative for hydrocarbon liquid fuels for non-road applications. But these applications account for nearly half of New Zealand’s liquid fuel consumption.

So, while car and truck manufacturers are playing around with every technology that can turn a wheel, New Zealand should climate-neutralise its supply of essential, non-road fuels. This will keep us busy well into the 2020s. By then, thanks to advanced fuel injection and exhaust treatment systems, tailpipe emissions from conventional vehicles will be insignificant compared with pollution from tyre wear. All road vehicles have tyres, so environmental concerns will not influence our choice of cars and trucks. We’ll use whichever technology is the most practical.

From Smoke to Mirrors outlines a transition plan that takes account of these and other factors. I did not invent the transition plan. Associate Professor Susan Krumdieck did that, leaving it up to people like me to flesh it out and show why it is practical. Krumdieck proposed a direct attack on the problem’s fundamental origin. Fossil fuels cause greenhouse emissions, and greenhouse emissions cause climate change, so Krumdieck says we should simply ban fossil fuels. If you read From Smoke to Mirrors, you’ll see how simple and practical this would be.

New Zealand can do this. In fact, New Zealand should do this. We are a very small country, and if we cannot work together, how can we expect the rest of the world to do it?We need all our political parties to work out a multi-party agreement. This is about banning fossil fuels and developing the infrastructure to fully replace the billions of litres of fuel we’ll need by 2040. Left-right political questions, such as whether to build roads or railways, would be outside the scope of this agreement.

I’ve met young people who say: “We’re stuffed anyway, so I’m just gonna get as much as I can , while I can, and to hell with having kids.” That’s OK if there is no technical solution, or if the solution involves returning to medieval technology. But I’ve seen enough good technology to know the world will not go there. So, I hope my book will provide hope for those young people who have been led to believe there is no hope. My grandchildren’s generation will be the first to grow up knowing that we can solve this problem, because “From Smoke to Mirrors” makes the solutions readable and easily understood.

New Zealand can be self-sufficient for climate-neutral energy. Other countries can benefit from Kiwi expertise. This is a multi-decade project that could inspire every New Zealander. The question is whether our politicians are up to the challenge.

NZ ETS passes the Kyoto bill to our children

This guest post is by Simon Terry, Executive Director of the Sustainability Council and co author with Geoff Bertram of “The Carbon Challenge: New Zealand’s Emissions Trading Scheme” (published by Bridget Williams Books).

New Zealand’s failure to reduce emissions to its Kyoto Protocol target means the taxpayer still faces a $1.1 to $5.7 billion net liability after all the ETS charges have been paid. That is the bottom line after taking account of what the ETS will contribute to paying off the Kyoto bill and Treasury’s advice about how to price what is left.

Years of narrow accounting, which had given the impression that the government was at various times in credit under the Protocol, was finally abandoned in the May Budget – at least in part. It broke with the past by recording key deforestation liabilities on the books, thereby signalling the real cost of New Zealand’s 22% overshoot of its Kyoto target.

This Budget entry officially scotches the myth that the government faces no financial impacts under the Protocol because it can rely on offsetting credits from plantation forests. Those plantation forests are earning credits now, but the credits must be paid back when the trees are harvested in the 2020s. Using these credits to pay the Kyoto bill is the equivalent of putting the cost of these emissions on the plastic for the next generation to pick up.

The Budget’s inclusion of a contingent liability for harvesting forests that are earning credits today is an important step, but it covers only the five years of the ETS to 2012. What the Budget failed to show is that the next period from 2013 to 2020 will be even more costly. New Zealand is actively negotiating a new international commitment that it expects will involve a stricter emissions target, while official projections are for the nation’s emissions to keep rising and carbon prices to also go up.

During that period there will be an even larger volume of forest credits earned by New Zealand and a corresponding contingent liability for their harvesting, which the Budget still does not record. This is despite a Treasury statement a year ago that it “will be necessary to recognise” a contingent liability right out to 2020. While the detail of the international commitment New Zealand will take on remains to be agreed, based on pledges to date and the current ETS settings, there would again be a very significant taxpayer liability after all ETS charges are paid.

The ETS simply fails to collect enough revenue to cover expected international commitments.

The ETS simply fails to collect enough revenue to cover expected international commitments. During the first Kyoto period, after all the exemptions, rebates and compensation payments are allowed for, the Government will receive just 12 million emission units net under the ETS, with each unit accounting for a tonne of greenhouse gas emissions. Compared to the current estimate for the Kyoto liability of 69 megatonnes (Mt), the ETS will reduce this by only a sixth during the Kyoto period.

That means over 80% of the cost of dealing with today’s emissions is to be dumped on a future generation of taxpayers.

You can imagine the reaction if someone proposed that the government take out a loan to cover 80% of everyone’s power bills and that loan was not due for payment until the 2020s. Yet that is the direct equivalent of what is happening under the ETS during its first five year at least. Consumers may not be accustomed to facing a price on carbon, but newness is hardly a moral defence for passing the bill to our children. Unless Parliament votes to withdraw from Kyoto (and only Act supports this), it is basic that today’s polluters pay today’s emissions bill.

The remaining unpaid liability of $1.1 to $5.7 billion is calculated as set out below:

  • The Budget lists, as a contingent liability, the need to cover 86.1 Mt of emissions resulting from harvesting forests that earn credits between 2008 and 2012. On the basis of the low carbon price of $20.29/tonne used in the Budget, it puts the gross liability for this at $1.747 billion.
  • The deficit from the Kyoto agreement however is only 69 Mt and once ETS revenue equal to 12 Mt is accounted for, the shortfall of 57 Mt represents a net Kyoto liability of $1.1 billion. Yet the Treasury warned in July 2009 that carbon prices could go as high as $100/tonne, and so the net liability could be as much as $5.7 billion.
  • During the next period from 2013 to 2020, the Treasury has projected a related contingent liability of roughly another 100 Mt. On that basis, the Budget should also show a further entry for this of about $2 billion at the $20/tonne carbon price.
  • It is possible that certain forests that are earning credits today will never be cut down, but there is no scenario under current government policy in which forest owners do not need to be paid for the newly stored carbon in those forests.

For today’s polluters to fully meet the Kyoto liability, total ETS payments obviously need to rise a great deal. However, households and small businesses are paying their fair share of the Kyoto bill, and it is major industrials and pastoral farmers that receive the heavy discounts at the taxpayers’ expense.

These subsidies and other compensation arrangements dominate the ETS flows such that only one in five of each dollar charged under the ETS becomes available to the Government to pay off the Kyoto liability.

Households already bear half the total costs resulting from the ETS during its first five years (52%), while accounting for just a fifth of all emissions (19%). Together with small-medium industry, commerce and services, and transport operators, they would pay 90% of the costs resulting from the ETS during the first five years while being responsible for 30% of total emissions.

With a tighter international commitment to come and New Zealand’s gross emissions still rising, the scale of the subsidies to major industrials and pastoral farmers is set to deliver increasing fiscal stress that will build up pressures for change in addition to the inequity that will be increasingly observed. Other moves overseas will also tend to put pressure on the ETS, including carbon border taxes.

Fortunately, New Zealand is well endowed with low cost options for reducing its carbon footprint

Fortunately, New Zealand is well endowed with low cost options for reducing its carbon footprint, including agricultural efficiency measures that cut emissions and the planting of permanent forests to newly store carbon. Once the notion that doing nothing will be costless is abandoned, it is surprising how much progress can be made under even modest assumptions. There are a series of options that together could deliver a 40% net reduction on the business-as-usual emissions otherwise expected in 2020 – and at no economic cost if the effective carbon price is assumed to be $30/t or higher.

As it currently stands, the ETS will reduce gross emissions by less than 1% during its first five years – relative to what they would have been anyway. Emission actually keep growing, but at a slower rate. Much the same is true out to 2020 if the ETS settings are not changed. Getting the Kyoto accounts straight is the starting point for a major reworking of carbon pricing policy.

Note: The Budget estimates of contingent liabilities can be viewed at: http://www.treasury.govt.nz/budget/forecasts/befu2010/038.htm The Treasury document drawn on states with respect to the gross liability for both periods: “180 million forestry credits will be used … At a price of $100/unit, this contingent liability could be as much as $18 billion for the period 2008 – 2020”. See: 2020 Emissions Reduction Target: Further Analysis, T2009/1811, 31 July 2009, p.7. While the Treasury amended the government’s online accounts following this July document, it has not registered a contingent liability for harvesting on its own website that tracks the Kyoto “net position”.

National snubs Labour, buys Maori support for watered-down ETS

Nick Smith announcedthis afternoon that National has cut a deal with the Maori Party to support an amended, watered-down emissions trading scheme. Key features (from the press release):

  • Revised entry dates of 1 July 2010 for transport, energy and industrial sectors and 1 January 2015 for agriculture
  • A transitional phase until 1 January 2013 with a 50% obligation and $25 fixed price option for the transport, energy and industrial sectors
  • A production-based industry average approach to allocations for trade exposed, emissions intensive businesses
  • A phase-out of industry support aligned with trading partners and the Government’s long-term -50 by 2050 emissions reduction target
  • Incentives for afforestation created by a domestic and international market for carbon credits
  • Enhanced transitional support for the fishing industry

Smith says that these changes will reduce the impact of fuel and electricity price rises to 3.5 cents per litre and 1 cent per kWh. In addition, the Maori Party get assurances that “further work will be done” on extending the energy efficiency assistance for low-income households, promoting new forestry planting, biodiversity protection, and provisions for treaty settlements affected by the deforestation provisions applying to pre-1990 forests. The government aslo released two background documents: a summary of the proposals and “Questions and Answers” about the changes.

A couple of thoughts spring to mind. The Maori Party’s support flies in the face of their minority report on the ETS Review, where they said they would prefer stronger action, not a weakening of the emissions cuts being considered. I suspect that the real meat of their deal lies in the treatment of pre-1990 forests, where many tribes have very significant assets.

It also looks as though Smith could not cut a deal with Labour, who would have objected to the price cap and reduced obligations during the new “transitional phase”, and the considerable softening of the long term phase out of free allocations to big emitters. Both of these moves have the effect of increasing the subsidy from taxpayers to big (often foreign-owned) corporates. At the same time, delaying agriculture’s entry into the scheme by two years may not do much to blunt objections from farmers if recent Federated Farmers pronouncements are anything to go by.

I’ll have more on this in due course, but here’s a revealing line from the Q+A document:

Assuming new afforestation of 50,000 hectares per year, New Zealand’s emissions in 2020 would decrease by approximately 20% relative to 1990 levels.

In other words, despite refusing to acknowledge forestry’s role in meeting targets during the “consultation” process, Smith has clearly known all along the role it would have to play — because he’s expecting it to deliver a big enough carbon sink to offset all of New Zealand’s emissions growth since 1990 and then 20% more. Words fail me — but only briefly, you may rest assured…

Why did Nick Smith hide the facts on forestry?

targetGovernment ministers have deliberately played down the role of forestry in meeting emissions targets, documents released under the Official Information Act suggest. Diligent digging at No Right Turn has uncovered a Ministry of Agriculture & Forestry paper [PDF] titled New forest planting and harvesting intentions under high carbon prices, which makes clear that forest planting will increase significantly under a stable Emissions Trading Scheme, and that even a modest ($20/tonne) carbon price could trigger planting of up to 100,000 hectares a year — a rate not seen since the forestry boom of the 1990s, and enough to offset a huge chunk of NZ’s emissions to 2020 and beyond. Climate change minister Nick Smith did not mention these figures during the target consultation process, though it is clear he must have known about them. His failure to front with the facts on forestry amounts to a clear attempt to manipulate public perception of the difficulty of meeting steep targets, and raises serious questions about the agenda driving government policy.

Continue reading “Why did Nick Smith hide the facts on forestry?”

No vision, no guts, no future

targetThe New Zealand government announced this afternoon that NZ would table a conditional emissions target of between 10% and 20% cuts on 1990 levels by 2020 [Scoop, Herald]. The range is supposed to allow for a response to the progress of international negotiations, and the conditions are that there should be a comprehensive international agreement that (according to the MoE Q+A):

…sets the world on a pathway to limit temperature rise to not more than 2°C; developed countries make comparable efforts to those of New Zealand; advanced and major emitting developing countries take action fully commensurate with their respective capabilities; there is an effective set of rules for land use, land-use change and forestry (LULUCF); and there is full recourse to a broad and efficient international carbon market.

Climate minister Nick Smith says that the target will be achieved by a mixture of domestic emission reductions, the storage of carbon in forests, and the purchase of emission reductions from other countries. The MoE Q+A page lists the measures in place to help NZ reduce emissions (#25): it amounts to a watered down emissions trading scheme, a $323 million home insulation and clean heating fund, a new Centre for Agricultural Greenhouse Gas Research, incentives for new energy technologies like sustainable biofuels, electric cars and solar water systems, Resource Management Act reforms and a National Policy Statement to support renewable electricity generation. No mention of forestry. Are the trees expected to plant themselves?

The target range comes as no surprise, given the signals emerging from the government over recent weeks, but the modest nature of the target and the fact that it is all conditional puts NZ in a weak position internationally. Smith & Co continue to insist that their targets, based on “50 by 50”, are in line with what the science is telling us, but that is only true if they cherry pick the most optimistic IPCC scenario, and ignore the evidence that’s been emerging over the last two years. This is not mysterious stuff, not news. The science and policy community has told the government the facts — it looks like they have chosen to ignore them and pander to those who would rather do nothing.

It is now transparently obvious that this National-led government simply does not understand the real challenges presented by climate change. They do not appreciate the full seriousness of the situation that confronts the planet, they underestimate the need to act, and they have completely failed to make any coherent assessment of what could be done. That amounts to gross incompetence, and they should be held to account for it, both at the ballot box and in the court of public opinion.

[Pusillanimous]