Wednesday, January 25, 2006

Moving on transport emissions?

According to this morning's Dominion-Post, the government is investigating targetting gas-guzzlers and SUVs with higher registration costs to push the public towards more fuel efficient vehicles. Needless to say, I think this is a great idea. Transport contributes 17.8% of our overall greenhouse gas emissions (2003), and is a growth area. Halting that growth and reversing it will be a major achievement towards meeting our Kyoto obligations. Doing it by targeting vehicle efficiency means it is less likely to damage the economy, and will result in a sustained reduction rather than simply a temporary behaviour change reversed with the next change of government. It will also have long-term payoffs for our persistent balance-of-payments problem. Looking at some rough efficiency audit results, comprehensive improvements in the New Zealand vehicle fleet could eventually result in reductions of 20 - 30% in petrol usage (and hence transport emissions) over "business as usual". Oil is one of our major imports, and so this will contribute significantly towards balancing our national books.

(BTW, does anyone have any data on our average vehicle fleet efficiency? It would be useful to know - and to see what can realistically be done in this area)

While everyone agrees with the desirability of increasing efficiency, there's still some disagreement over the exact nature of any policy and incentives. The Motor Industry Association (representing vehicle importers) opposes any move which might target imports, and instead prefers incentives based on vehicle age (thus encouraging people to buy newer vehicles). This of course misses the real target - efficiency - and penalises those with older, but efficient vehicles. The Business Council for Sustainable Development wants cash-in-hand incentives, while the government wants penalties and differential taxes. Taxes vs incentives makes no real difference to the effectiveness of the policy; instead its a question of who pays and how the burden is distributed. I think the government has the right approach here; we shouldn't be rewarding polluters for stopping, but rather ensuring that they pay the full social cost of their activities. And that way we can also use the resulting revenue to fund other programs or reduce taxes in other areas - the "double dividend".

There's no details on when any policy will be implemented, but I hope it's soon. A solid policy here will result in substantial reductions in our transport emissions, and help to set us on a far more sustainable path. Combined with the biofuels initiative, it will make a real difference towards meeting our Kyoto target. And the sooner we start, the better.


Its a similar strategy to the failed carbon tax credit policy, but I do agree that social cost needs to be put into the equation.
IMHO I thaink the government requires a larger strategy, that uses both the carrot and the stick; tax incentives for firms who reduce by (let's say) at least 20% their greenhouse gas emissions, focusing existing PGSF funding to projects on reducing emissions from the industrial and agricultural sector, and increase the replanting rate of plantation forests to over 50,000 hectares annually (slightly higher than the rate only a few years ago, FYI the current rate is closer to 15,000) So long as the carbon credit system does not change in light of the recent research in trees producing methane, it's of economic benefit to avoid the penalties of breaching Kyoto.

Of course when Stats NZ says that the majority of emissions occurs by households, and not industry, it becomes less of an issue of reforming industrial practice and getting New Zealnders to restrict their habits...a tough sell.

Posted by Geoff Hayward : 1/25/2006 12:27:00 PM

Geoff: markets only work properly when private costs equal social costs. Otherwise, you get people dumping their costs on others. While its not a proper carbon tax, this sort of scheme will at least go some way towards bringing the true cost of greenhouse emissions into the equation.

The methane research will reduce the gain of planting trees, but it won't turn them into net emitters. Unfortunately most forestry is private, and replanting is being hampered by both low international timber prices and a conscious capital strike for devolving carbon credits (something which is simply pointless for plantation forests which will be eventually cut down). The government needs to plant trees, but they're probably better off doing it as erosion control and restoring native habitat rather than for commercial forestry.

As for StatsNZ, they were talking about primary energy use, not strictly emissions. Our biggest greenhouse emitters are farmers - but they're a sufficiently powerful lobby group that we're going to end up subsidising their costs regardless.

Posted by Idiot/Savant : 1/25/2006 01:25:00 PM

This thing about farm emissions is a nonsense, AFAICT. 4 billion years back the earth had about as much CO2 in the atmosphere as venus, it's since been bound up into limestone and hydrocarbons by life. Farms negate that process a little by using hydrocarbon based fertilisers (plus fuel for transport and processing, same as every other industry), but mostly it's neutral.

Yea, methane. Produced as bacteria break down vegtable matter, all the time, everywhere. It breaks down naturally, while mined CO2 emissions are cumulative and basically permanent.

The problem is fossil fuels in all their forms, and what the world needs is economically viable alternative energy sources (and improved efficiency of use).

Tax all fossil fuel products to fund development of the alternatives, heavily. Problem solved, or at least slowed up a bit. It'd help us get ahead on tech before the oil prices skyrocket too.

Posted by tussock : 1/25/2006 04:13:00 PM

Tussock: it is a problem, in that methane emissions have vastly increased as a consequence of land-use changes due to human agriculture. There's an interesting section in The Weather Makers (quoted already by Frog, IIRC) which talks about this.

That said, as a planet we can hardly stop growing food, and so attempts to reduce greenhouse gases should focus squarely on fossil fuels.

Posted by Idiot/Savant : 1/25/2006 05:26:00 PM

SUVS are (or so I've been told) a consequence of California's attempts to push the public and the industry towards more fuel efficient vehicles through their zero emissions policy. Apparently SUV's don't have to comply with the zero emissions requirement because they are defined as something more like a truck- so the industry consciously and successfully set out to foster demand for SUVs in the consumer marker rather than focusing on improving the technology...

I'm not saying don't regulate, of course, I just think this is an interesting illustration of how well meaning regulation can result in unintended bad consequences.

Posted by Amanda : 1/25/2006 08:55:00 PM

Methane risen in farming? Interesting theory, but I'd question how much more we produce than the great herds of ungolates that preceeded us (or Moa locally).
Anyone want to link me to a proper study? Emptying the oceans of the tasty fish would seem to be much more of a problem.

Posted by tussock : 1/26/2006 01:09:00 AM