Climate Change & Governance: Wednesday Afternoon

More notes from last week's Climate Change and Governance Conference, from the Wednesday afternoon policy sessions.

Lord Ron Oxburgh and Professor Ralph Sims (Massey University) gave back-to-back talks on biofuels and their potential to replace or partly replace fossil fuels. Lord Oxburgh outlined the big picture, then talked about using ethanol as a transport fuel. Making ethanol from crops such as corn is highly inefficient (he estimated that with US farming practices, the energy payoff is only about 20% - meaning that you get back only 20% more energy than you put in to grow, harvest, and process the crop). But it's far more efficient to make biofuels out of rubbish. In Canada, a company called Iogen has a pilot plant producing ethanol from waste straw, which is about to be ramped up to full-scale production. This sort of process would remove the current competition between food and fuel crops, and give us a secure source of transport fuels for the future. Ralph Sims then outlined the situation in New Zealand: we could supply 7% of our diesel needs right now from animal tallow, and waste wood could provide 50 PJ a year, or just short of half our petrol needs. All that is required is for the government to create a market by establishing a target for fuel companies; once that is done, the market will do the rest. He also echoed other speakers in arguing that the government's R&D investment did not match the enormity of the problem (this seemed to be one of the key themes of the conference, along with the need for a carbon tax and for a cross-party agreement to provide policy stability).

Associate Professor Ralph Chapman (VUW) spoke on "policy options for New Zealand in the absence of a carbon tax". The first part of ths covered the misleading stories we tell ourselves - or rather, that vested interests tell us - to justify inaction on climate change. These were systematically eviscerated. The second part dealt with the outlines of a credible policy program. A key point here was the need to avoid policy switches and what analysts call "dynamic inconsistency" - policy changing with every election. This sends conflicting signals to the market and prevents businesses from making the required investments in new technology, as they cannot be certain of profiting from them. He also saw it as absolutely vital to put a price on carbon for as broad a segment of the economy as possible (his preferred method was emissions trading, with credits being allocated per capita to ordinary New Zealanders rather than grandfathered to vested interests). In its absence, he thought we should establish a goal with some international "signalling value" (as in it would signal to other countries that we were taking the problem seriously). His suggestion here echoes that of the Greens' Turn Down the Heat package [PDF]: a fully renewable electricity system by around 2030 or so (the timescale being chosen to allow the change to take place by the slow retirement of existing infrastructure). He also suggests setting immediate achievable biofuels targets (5% for diesel and 3% for ethanol), and regularly increasing them - again on a timeframe to allow for the turnover of capital stock. Finally, there was a need for government to build a constituency for change - to stress the urgency of the problem and the necessity of dealing with it, and bring the public with them. This was again a point made again and again over the course of the conference (even by Tony Blair). Unfortunately, the current government favours political cowardice.

This was followed by a series of responses from a panel and some discussion:

• Alan Milne (Mayor of Kapiti District Council) lamented the lack of planning by local businesses in his region.
• Molly Melhuish (Sustainable Energy Forum) noted that certain business interests seem to have a stranglehold on policy, to the extent that the environmental movement was not even consulted on the recent review of climate change policy (compare that with the Climate Change Office's frequent "stakeholder engagement days", which were almost entirely with business and industry groups).
• Peter Neilson (Business Council for Sustainable Development) noted that many businesses simply aren't planning for climate change, and are not including it in their strategic plans. There was widespread ignorance of current policy (many businesses had not heard of the proposed carbon tax until the day it was scrapped), and a belief that it would all just go away at the next election. The BCSD thought that the first part of any policy was to get businesses to measure their emissions, on the basis that management requires measurement. Beyond that, they favoured an internationally-tied emissions-trading regime, coupled with a projects mechanism of positive incentives for reductions before it comes into effect. Naturally, as a representative of mostly established businesses, he favoured grandparenting of credits (which would be a massive wealth transfer to those companies).
• Dave Brash (Ministry for the Environment) said that policy needed to focus on agriculture and forestry, with the energy sector a distant second. He hinted at movement on nitrous oxide in the very near future as the co-benefits for water-quality were so great (basically, too much fertiliser and cow piss is why we can't swim in our rivers). He stressed the need for policy to be durable in the long-term (that is, not change every election), and that it must look beyond Kyoto (or rather, beyond CP1). And of course he thought that there needed to be a price put on carbon, and the sooner the better. Finally, he noted that a focus on adaptation would sharpen the minds of farmers and developers, and possibly bring them on board (the prospect of your livelihood becoming much more vulnerable tends to do that).

The subsequent Q&A session was fascinating. Someone raised the prospect of a social marketing campaign from government to stress the problem, and this was generally agreed with by the panel (though it would require buy-in from the environmental movement - a plea for less friendly fire?). Someone else noted that Tony Blair was showing leadership on climate change, and was struck by the fact that Helen Clark and the New Zealand government weren't doing the same. The absence of politicians was noted, and it was suggested that it should have been the Prime Minister of New Zealand speaking at the conference, rather than the Prime Minister of the UK. Someone asked whether subsidising wind power would work, to the general answer of "it doesn't need it". There was a suggestion for an independent panel or task force to suggest policy and provide durability, but I suspect that no government would agree to that. The question of how cross-party support for durable policy could be obtained was met with a deep silence (nobody trusts National, it seems). But the most interesting comment was made by Peter Neilson, who noted that

When I was a Minister [back in the Rogernomics days - I/S], I would get backbench MPs coming to me because they had five handwritten letters from constituents saying that [a particular issue] was a crisis for them.

Which immediately suggests a solution to the current political deadlock. If we want credible, durable, sane climate change policy, we have to make ourselves heard, and quickly.