Consultation on setting New Zealand's post-2020 climate change target Allen Cookson General Principles

Consultation on setting New Zealand’s post-2020 climate change
target

Allen Cookson

General Principles
A. The more parties there are attempting to reach agreement, the more
difficult it is to achieve a resolution of differences. The history of trade
negotiations, and much research on the subject, including game theory,
confirms this. Should the proposed conference be a flop, or too weak,
governments should consider a climate agreement between parties with more
commonality of position. If this worked well, accretion of additional adherents
to the agreement would be expected over time.
B. There should be incentives for adherence to the principles agreed to, and
penalties for breaches. Statistics and their measurement should be
transparent. Research teams should be multinational and independent of
governments.
C. Trade treaties should be subservient to the climate agreement. The
agreement should aim to have participants favouring other participants over
non-participants.
D. Requirements of the agreement must be palatable to politicians. Little or no
decline in real per capita income should be planned for. Genuine Progress
Indicator would be the best measure of progress.
E. As the human habitat is finite, quantitative growth in economic activity with
negative climate externalities must cease, then decrease because output of
greenhouse gases must decrease to a sustainable level. Furthermore,
sequestration of carbon dioxide by photosynthesis must increase. This requires
more land to be set aside for forests, including production forests. Carbon
dioxide sequestration other than by photosynthesis introduces a new problem-
lowering of atmospheric oxygen concentration.

Mitigating the need for less economic activity is the possibility of technical
advances (such as more efficient energy conversion) and more efficient
administration.
F. Taking into account various factors including climate, researchers from
several disciplines agree that Earth cannot sustain more than about 2 billion
people with a reasonable quality of life using present technology. One billion
would allow a good quality of life. The most crucial factor limiting human
population is area of land, which is projected to decrease significantly if global
warming continues. Because rapid population decrease would produce
dangerously high aged dependency ratios, decrease must be slow. A
sustainable global population may well take about 500 years to achieve, largely
because of population momentum. As one would expect, there is a
relationship ceteris paribus between population and greenhouse gas
emissions. Usually population is omitted from discussion on climate change.
Greenhouse gas emissions per capita and per capita ecological footprints of
different nations are commonly compared when the correct variables relevant
to sustainability are total greenhouse gas emissions and ecological footprint. It
is important to NZ that the correct measures taking account of population, are
used in any climate change agreement.
G. A small, but increasing number of respected economists (e.g. Prof. Herman
Daly, Maryland University and Prof. Tim Jackson, Surrey University) argue that
the fractional reserve monetary system operating almost everywhere would
collapse if there were continuing decline in real economic activity. No
mainstream economist been able to show how a fractional reserve model
could be sustained in those conditions. Recently economist Dr Eric Crampton
(NZ Initiative) wrote that infinite growth is possible on a finite planet. His faith
is in rapid technical advance without limits. I have yet to meet a scientist who
believes that. There are academic economists, bankers and central bankers
who, like Daly and Jackson, believe the present system should be changed to a
100%reserve/full reserve/debt-free monetary system which could operate
successfully in a negative growth or steady state environment.
H. The low biocapacity and harsh winter conditions of high latitude countries
makes them highly dependent on fossil fuels. Frozen seas prevent access to
tidal and wave energy in winter. Winds are less at that season. If such
countries reduced/ceased using fossil fuels, they would be providing an

ecological service to the rest of the world, in the form of areas of high albedo
sea ice. To encourage those nations to join the climate agreement, they could
be paid for this service. The payment could be based on the area of sea ice
countries possessing land north of 60°N, had in their maritime exclusive
economic zone.
I. Market forces usually overshoot an hypothesized equilibrium point.
Destabilizing oscillations in carbon credits may develop, particularly if trade in
them is allowed with countries outside the climate agreement. This would
enable purchase of carbon credits with the money earned from sale of fossil
fuel or its embodied energy in various products. Therefore trade in carbon
credits must be limited to climate agreement partners. Unless price of carbon
is reasonably stable though increasing, its value as an incentive to moving to
carbon substitutes and developing technology for reducing GHG emissions is
diminished.
J. The agreement should require partners to apply prescribed border taxes for
imports from countries outside the climate agreement, of fossil fuels and
products containing embodied fossil energy.
K. I favor instead of purchase and sale of carbon credits, auctioned leasing of
export plus domestic emission quotas (for oil, gas, and coal) and domestic
emission quotas (for agriculture GHGs). These quotas would be owned by an
international environmental authority and leased for set periods (say 10 years).
The first leases would be allocated by grandfathering for a period (say 5 years)
to allow adjustment to the new conditions. Upon lease expiry, some quotas
would be retired to progressively reduce GHG emissions as alternative
technologies become available. The diminishing supply of quotas would
increase the lease price. Lease revenue would be transferred to research and
development of substitutes and aid to poor countries. Sale of leases would be
forbidden. This would prevent speculation.
      Here is more detail on my preferred climate change treaty:
       1. Every country would be allocated a very low lease-free allowance. This
is to allow poor countries access to fossil fuels for essential needs. This lease-
free allocation diminishes over the years as renewable substitute energy
becomes available.
      2. A world environmental authority would auction quota leases as
described above.
      3. Some lease income would be used to subsidize research and

development of substitutes for fossil fuels, energy conservation, carbon
sequestration, and reduction of agricultural emissions (methane and nitrous
oxide, but not carbon dioxide). Some would be used as aid to poor countries as
below.
       4. Family planning, birth control and education aid (particularly for girls
and women) will be available to poor countries. Legal and political
empowerment of women equal to that of men will be required of treaty
participants.
      5. Targets will be total GHG emissions, not per capita emissions, with
slowly increasing rigor as populations drop.
       6. Poor countries will be provided with renewable energy infrastructure,
including maintenance and operation training.
       7. Countries highly dependent upon oil and gas as exports or import
substitutes will be expected to progressively reduce their fuel exports and
domestic burning and instead increasingly use their petroleum deposits for
petrochemicals, polymers, bitumen, rubber, carbon fibre, along with associated
industries such as tires, textiles, and clothing.
      8. Timber from tropical and temperate forests will earn carbon credits
provided it is grown sustainably with replanting after milling. If the wood is
used to make buildings, boats, or furniture, it will attract more credits than for
firewood or cement manufacture. Payments will be made for removal and
sequestration of the carbon as above for boreal evergreen forests, which could
be replaced by alder, birch, larch, and willow. (This is because high albedo snow
under deciduous trees cools Earth more than carbon sequestration by dark
evergreen conifers) Highest credits will be for reforestation of previously
deforested tropical areas.
      9. Assistance to a country will be dependent upon its meeting its
obligations.

 Choices of Actions NZ Could Take
If an appropriate carbon pricing scheme operates, the following initiatives will
become economically beneficial to NZ. Some of these technologies could be
income earners overseas. It is impossible to suggest realistic targets in the time
allowed for this consultation. However MFE should be able to do so with the
help of various other ministries and consultants.

1. If the Tiwai Point Aluminum Smelter is closed down, 572 to 610MW of
hydropower will become available to the New Zealand grid. That’s about a
third of the current consumption in the South Island and 15% of national
consumption. What should be done with this bonanza of renewable energy?
The further the electricity has to be transmitted, the more energy is wasted in
resistance and induction losses. Also any new power lines required will be an
additional cost. Therefore use the power in Southland, Otago and perhaps
Canterbury, because the power station is in Fiordland.

The power could be used to replace coal at Edendale and perhaps Clandeboye
and more northern Canterbury dairy factories. The industry claims that
replacement of coal would greatly increase costs. Maybe not if the power price
were lower! As government subsidized the smelter since its inception, why not
a dairy factory? Its near zero greenhouse emissions would provide a strong
marketing feature to potential ‘green’ customers in our proposed climate
agreement. After all, government is subsidizing research in reducing farm
greenhouse gas emissions now.

2. A nitrogenous fertilizer factory using electrical energy instead of natural gas
would provide another competitive green marketing tool for our farming
industry. Norway had such capacity before World War II.

3. Lower power prices would reduce irrigation, domestic and dairy shed power
bills on farms and the ecocompetitiveness of other industries.

4. Electrification of rail lines would strengthen environmental branding of our
economy, by reducing diesel consumption.

5. It could be worth maintaining a diminished aluminum production capacity.
This would retain a small skilled workforce which could be expanded in future.
Aluminum manufacture liberates about 54 kg of carbon into the atmosphere
per cubic metre of the metal if the electrical energy required is generated by
hydro. That excludes mining of bauxite and its conversion to alumina. The
corresponding figure for steel is 7,710,000 kg. So! Replace steel with aluminum
where possible, e.g. roofs, car bodies. Also! Energy for making things from
recycled aluminum is less than from recycled iron/steel because aluminum has
a lower melting point.

If the externalities of climate change and ocean acidification are taken into
account, foreign aluminum manufactured using electrical energy generated by
coal-fired power stations, will be hopelessly uncompetitive with NZ aluminum
produced from renewable energy.

6. It might be possible to stitch up a deal with a Japanese car company for NZ
manufactured aluminum car bodies to be incorporated in their cars. An
Economist article states that a 10% reduction in mass leads to a 6% reduction
in fuel consumption. Reductions of mass up to 45% are said to be possible.
Such cars are stronger and safer than steel cars.

7. Aluminum roofs have much less embodied fossil energy than iron roofs and
they do not need painting or galvanizing. They have high albedo which has
reduces climate forcing.

8. Use of nitrogen fixing plants such as lotus, clover and lucerne instead of
synthetic urea should be encouraged. Research on improved varieties of such
plants should continue. An American study estimated that use of lucerne could
reduce synthetic nitrogenous fertilizer application 70%.

9. Research in feed which produces low methane output from farm animals
and also genetic improvement of farm animals with regard to their methane
output, should continue.

10. Carbon credit for soil carbon sequestration should not be overlooked.

12. Biochar from waste wood should be included in soil carbon. Dry areas
should be avoided for use of biochar in sequestration of carbon because of fire
danger.

11. Use of concrete for buildings should be discouraged. Currently carbon
dioxide emissions from cement manufacture are 7-10% of manufacturing
emissions. Quite apart from the concrete itself, steel reinforcing with its high
embodied fossil energy is required. Timber floors and framing should be
encouraged. Modern lamination techniques allow timber buildings up to 7
storeys currently. Such buildings can be constructed to high levels of
earthquake resistance.

12. It is possible to produce jet fuel and biodiesel from microalgae. The best
output achieved is 136,900 L ha-1 a-1 using an alga with 70% oil to biomass
ratio. The fastest growth is achieved in a high nutrient concentration such as
sewage or dairy effluent ponds. The product has been used successfully in
diesel trucks and aircraft (in admixture with petroleum sourced jet fuel). The
residue after the oil has been pressed out of the algal cells is rich in nutrients
such as nitrogen and phosphorus. Also the water left behind is an important
nutrient for agriculture and forestry. Unfortunately Christchurch and
Waimakariri constructed pipelines delivering treated waste water into the sea,
thereby missing out on the chance of irrigating farms and forests. For
Christchurch the missed opportunity was 7,000 ha of highly productive
agricultural land or 12,000 ha of highly productive plantation forest. I and
several engineers pointed out the potential, including a fuel industry based on
microalgae, by securing land for future oxidation ponds to the west of
Christchurch and Rangiora. A scientist has estimated NZ could produce all its
diesel or all its jet fuel from microalgae. Lagoons as well as land could provide
oxidation ponds. An economical continuous flow process for producing biofuel
from microalgae has not yet been devised. By linking agriculture and forestry
into the scheme, the biofuel will become competititive. Government should
continue to support NIWA’s research at Christchurch which appears to on the
verge of success. Only diesel and jet fuel have high enough energy density for
agricultural machinery and aircraft. So, such biofuel offers an essential
renewable energy for sustainable advanced economies.

13. The most significant renewable energy sources produce electrical energy.
If, as is necessary to avoid climatic catastrophe, the whole world goes
electrical, demand for copper will skyrocket, as it is by far the best conductor
for armatures. Therefore we can expect prices of generators and motors to
skyrocket. It would be prudent for NZ to develop its use of electric vehicles and
generating capacity now to beat the price rise. A recycling and generator and
motor manufacturing industry could be developed. Hydro offers the highest
energy return on investment. Apart from small schemes, nearly all sites are
already taken. I suggest Mokihinui should be reconsidered. The dam should be
half the previously planned height. That would leave half the gorge for white
water kayakers and rafters. They could paddle up the lake to the bottom end
of rapids, then clip kayaks, rafts and people on to a ski tow-like cable to be

taken to the top of the gorge. This uses renewable energy unlike the present
practice of flying up by helicopter. It also offers the possibility of cheaper prices
for West Coast electricity consumers and new industries. Fish ladders could be
incorporated in the dam.

I think there are one or two gorges in south Westland which no-one goes up. A
dam at the mouth of such a gorge would have insignificant impact on scenery.

Private wind and solar generators linked to the grid should be paid at the same
rate as energy they purchase from the grid. They perform a service in
improving storage in hydro lakes. Also, distributed generation can reduce the
demand for costly enlarged grid capacity.

Research on tidal and wave energy should continue.

14. If we aspire to improved real per capita income in a finite habitat our
population must stop growing. I advocate generous suspensory loans for
approved real estate (residence for family or investment income) paid on the
birth of the first two children to responsible parents. There would be no
further payments for more children. There would be no such payments for
children born before the mother was 18, though other support would be given.
For children born after the mother is 24 the payments would be greater. If a
child reaches the age of 18 without suffering serious neglect or abuse at the
hands of a parent, the loan for that child becomes a grant. If there is serious
neglect or abuse, the responsible parent(s) have the loan foreclosed. This is a
simple presentation of my proposal without detail on multiple births,
separation, etc.

Subsidy of contraception and free sterilization for those requesting it would be
provided. Mentoring of parents would be provided. and attendance at such
mentoring would be obligatory for first time parents who have received the
suspensory loan.

Immigration should be limited to levels which do not increase our population.