Thursday, February 09, 2006



Kyoto: Putting a price on dairy conversions

At the moment, world dairy prices are high and timber prices are low. This is helping to drive a trend to convert land used for forestry to dairy farms - putting increased strain on the environment through effluent runoff and vastly higher water use. Dairy conversions - and the fact that our farmers seem constitutionally incapable of cleaning up after themselves - are one of the factors driving the increasing pollution of our rivers and streams. They also result in increased greenhouse emissions, converting a sink to a source. And this is going to cost us.

Previously the government has kept the figures under wraps, but according to cabinet papers obtained by the Herald, it will be enough to add approximately 32 megatonnes of CO2-equivalent to our existing Kyoto overflow, effectively doubling it. If we purchase credits on the international market, this will cost us an extra NZ$ 300 million, and possibly more if carbon prices increase.

What can be done about this? A big incentive for conversions is the prospect of a deforestation liability for forest owners who fail to replant after cutting down their trees. The government has said they will cover a land use change of up to 10% of our forest area on 1990 levels, but beyond that they may devolve liability to landowners. This has created a perverse incentive to deforest now to avoid the bill later. Clearly something has to change: either the government has to remove the cap, or it has to impose the liability ASAP to ensure that those converting land pay the full cost of their activities. From the phrasing of the above, it should be clear that I favour the latter. While the cap is a perverse incentive, the underlying problem is the market - and it will only be solved by internalising the externality of carbon pollution and ensuring that the private cost of deforestation is equal to the social cost. Unfortunately, this may be unpopular with the farming and forestry sectors, and to work it would also require payments to those converting land in the other direction, so I expect the government to display its usual craven cheapness and take the easy but stupid option. But I hope to be pleasantly surprised.

Another option is to give in to the forestry owner's capital strike and devolve carbon credits to them. As I've said here, I think this would be an insane policy - either scientifically bogus or an invitation to corporate fraud - but no doubt some boondoggle could be worked out if we were to use internal carbon trading in place of the carbon tax.

A third option is to work with local government to limit new dairy farms. Environment Waikato had the right idea here with introducing resource consents for intensive farming and "cap and trade" for nitrogen runoff around Lake Taupo - but that would be unpopular with farmers, and would take some time to feed back through the market to affect the deforestation rate.

All of these options will be heavily resisted by the business and farming sectors, who are rabidly opposed to taking any action to reduce greenhouse emissions. But if the government doesn't act now, we will all end up paying for it later - either explicitly in the form of carbon credits or indirectly in the form of more droughts. And while the latter is a form of "polluter pays", its one I think we'd all rather avoid.

5 comments:

Here you talk of processes that I suggest you do not understand.

Questions
1 Quantify the recently identified model inadequacy with regard to carbon sinks and Plant CO2 emmissions.

2What is the relavancy of nitrogen and the climate model.

Posted by maksimovich : 2/09/2006 11:19:00 AM

1) between 1 and 4% - meaning that trees are still overwhelmingly a net sink;

2) nitrous oxide is a greenhouse gas approximately 300 times more powerful than carbon dioxide. It's not considered a big issue in most countries, but it makes up 18% of New Zealand's annual emissions. The chief sources are nitrogen-based fertiliser and animal (mostly cow) urine. The same sources are responsible for the pollution of much of our waterways, and there's an obvious synergy with any reduction in emissions.

But, for the avoidance of confusion, I've corrected the "carbon dioxide" in the first paragrah to "greenhouse", since its really CO2-equivalent emissions I'm talking about.

Posted by Idiot/Savant : 2/09/2006 05:42:00 PM

Sorry there was no error in my question to identify CO2 emissions from plants.

Plants in the abscence of light and its associated wavelength enhancers stops photosynthesis and respire by using o2 and the expiration of co2 and other waste gases.

The model I suggested is what is used by the Max Planck institue and indeed a variety of similar models were used by the IPCC.

Unforunately the coefficients of the models are substantially distorted due to optimisation of the exogenous variables.

The model structure is based on optimum laboratory conditions and excludes the natural variation of seasonal change outside the tropics.

This was identified to the IPCC by the Russian Academy of science 2.5 year ago but seems to have been "OVERLOOKED"

Other qualitative attributes that are missing are plant types ,cold spells,drought shock. wind.Unfortunately we do not live in a perfect world,or a virtual world and like all models they require substantive updating.

2)Nitrogen is also what I stated.All elements except hydrogen in the prescence of oxygen oxidise and become acidic.The importance of nitrogen is at a microenvironmental area and its relation with microorganisms and the terrastasis of the ambient atmospheric pressure.

Still we all need to learn more.

Posted by maksimovich : 2/09/2006 06:52:00 PM

As an addendum I am apolitical ,the distorion of science,and the developmentof science for agendas perceived or otherwise is objectionable.

This especially identifiable in the risk ratios and the "disease of the day"

The failure of ALL parties to identify solutions for low cost energy is laughable.The entire Kyoto process and its mechanism is awash in a sea of beureaucratic gobbldeygook,designed to obfuscicate the data and identifiable solutions.

The process was designed by the beaureaucrats of the EUP.

Posted by maksimovich : 2/09/2006 07:12:00 PM

An attack on farmers need not be the starting point for this discussion (ie farmer's constitutionally unable to clean up after themselves).
Your source recognises that "North Island exceptions (to the water quality problem) were the Waikato River, which potentially met the guideline." With Waikato being the most highly concentrated dairying in NZ, this hardly adds up. More science, less half baked blabbering thanks.

Posted by Mark : 4/03/2007 02:34:00 PM