The Greenhouse Policy Coalition have released a report [PDF] claiming that meeting our Kyoto obligations will stifle growth. While it could be pointed out that the GPC - a collection of New Zealand's worst carbon polluters - have just a smidgen of self-interest in claiming this, and that the author, Alex Sundakov, is one of New Zealand's highest-paid prostitutes, I think it's better to focus on the real problem: the report is simply grossly dishonest. It makes a number of highly questionable assumptions and uses some frankly shoddy mathematics in order to vastly overstate the scale of the problem and build a straw-man argument that we cannot meet our target solely from emissions reduction and that therefore we shouldn't bother.
Questionable assumption number one is that no energy savings can be made in the household sector. 75% of household energy use goes on water and space heating, and due to the poor quality of our housing stock, most of this is simply wasted. There are a number of simple measures - insulation and (in many areas) solar water pre-heating - which can produce significant savings in this area, as anyone who has lived in a properly insulated house will attest. These are ruled out on the basis that they reduce the cost-per-square-meter of heating, and therefore will result in increased energy demand. Perfectly rational, if your knowledge of the world is limited to the supply-demand curve, but if we take this seriously, it is telling us that the way to reduce household energy demand is to ban insulation, thus ensuring the price is high and usage is low. Running it in reverse like this exposes the flaw: our demand for heating doesn't fluctuate much with price - instead its fairly sticky, and there's a concrete limit to how much we want to use set by basic comfort issues. Which means that efficiencies are real savings, rather than invitations to greater use.
Questionable assumption number two is that no energy savings can be made in the transport sector - despite this being the easiest area to make savings in. As with household energy use, the assumption is that any efficiency gains will be eaten by increased consumption (in this case, driving more and bigger cars). This may have held when petrol prices were falling in real terms, but its certainly not holding now - the recent high prices have seen people changing their transport patterns and ditching their SUVs in favour of cars that are cheaper to run. Change clearly is possible, and it is just a question of driving it with the right policies.
Which brings us to the shoddy mathematics. The report rightly points out that we cannot expect to make savings from the agricultural sector, and that industrial processes tend to be covered by Negotiated Greenhouse Agreements - which means that any savings have to come from the domestic transport and domestic and commercial energy sectors (commercial transport being mysteriously excluded). Together, these sum to around 36% of our total emissions. The report then continues:
By 2012, New Zealand's emissions are expected to exceed its Kyoto target for the first commitment period by about 35% [footnote]. In other words, if we were to try to meet our targets through a substantive attempt at emissions reductions (as is expected under the Kyoto Protocol), the emissions from the target categories would need to be almost entirely eliminated. This is clearly not plausible...
And its not. But it's a straw-man, because the government has never suggested that we try and meet our target solely through emissions reduction. The Kyoto Protocol allows emissions to be offset by land use changes - basically, forest sinks - and new plantings will absorb around two-thirds of our gross emissions increase. Our true target is a reduction of 36 MT CO2-equivalent, or 12% - not the 35% the GPC claim. This is still a big target, but with the right policy mix - biofuels, carbon taxes, changes to the building code, forest planting and high petrol prices - it is perfectly achievable.