There is no doubt that the war Israel and the United States have launched against Iran will have global economic consequences. While it is difficult to know what those consequences will be, it is hard to see them as positive, and they could be very, very negative.

Already we have seen oil prices spike by 8 percent since last week, and by much more since January.

Oil prices reached above US$100 a barrel with Russia’s invasion of Ukraine in 2022, but then gradually started to fall, and by the start of the year had returned to their pre-2022 level of US$60.

Just before the weekend they had risen to US$70 and now they are almost at US$80. With the Strait of Hormuz effectively closed, they could rise much more.

That is on the price front. There could also, unlike in 2022, be problems on the quantity side.

If it continues to be difficult to ship oil out of the Middle East, then shortages of oil might start to emerge. The countries that will do best in such a situation are those with large stockpiles or plenty of bargaining power.

The Pacific Island countries have neither.

Reliant on 80% oil
The Pacific is also vulnerable because of its extreme reliance on oil. According to a 2022 UN report, the Pacific meets 80 percent of its energy requirements through oil.

Even in the electricity sector, renewable energy sources make only a limited contribution.

There has been some growth in renewable energy as an electricity source. According to analysis by Janendra Prasad at UNSW, the share of renewable energy in electricity production in the Pacific has increased from 17 percent in 2017 to 24 percent in 2023. That is still low, and nowhere near what Pacific governments are themselves targeting (in excess of 80 percent by 2030).

The Pacific is also vulnerable because of its lack of domestic oil production and very limited storage capacity. In fact, Tonga suffered fuel shortages last year due to problems with its fuel depot and a stranded fuel vessel.

With drivers now queuing in Australia and the UK to get their petrol before prices rise or petrol rationing begins, it wouldn’t be surprising to see queues develop across the Pacific.

Governments can tell people not to panic, but it may seem like a rational response given the risks of petrol price rises and rationing.

It is important to clarify that PNG is the “odd one out” in the Pacific. PNG will actually likely benefit from the crisis as it is a large exporter of LNG. The government’s tax and dividend take will increase as LNG prices rise.

PNG oil refinery
PNG also has an oil refinery. And this war will also help the prospects for PNG’s much-delayed and still-uncertain future LNG projects by increasing the value to Asia of sourcing its LNG nearer to home than the Middle East.

So far we have focused on petroleum. But there are also the wider ramifications of the war.

It may lead to an uptick in global inflation, and may even push the world towards or even into recession. An oil shock on its own is unlikely to be enough to lead to a recession, but an escalated, widespread Middle East conflict (or possibly a conflict that extends to Turkey and Europe) certainly could.

Again, PNG will benefit from a further increase in the gold price as investors lose faith in the US, and therefore in the US dollar.

But overall, what is bad for the world is bad for the Pacific. Remittances, tourism, fishing licence fees, aid and investment returns would all suffer in the event of a global recession.

There is a possible upside. If Iran capitulates and, with or without regime change, gives in to US demands, then, with sanctions removed, oil production might go up and oil prices down.

Right now, that doesn’t seem like a likely scenario.

Relevant positives
More relevant are the positives that could limit or to some extent offset the downside for the Pacific.

One is that it is still unclear how long this war will go on for. The shorter it is the less worrying the outcomes.

A second is the positive role Australia can play. Although there are questions about Australia’s own limited oil storage capacity, Australia will be under pressure to share whatever oil it is able to import with its Pacific family.

Third, and longer-term, this crisis, especially if it is long-lasting, might make the world more serious about the renewable transition, not so much to avoid dangerous climate change, but to shore up energy security.

Understandably, for the Pacific, which is highly vulnerable to climate change impacts and whose emissions are negligible at the global level, the focus to date has been on climate change adaptation rather than mitigation.

But the sort of crisis currently unfolding should give the Pacific countries and their funders a stronger incentive to close the growing gap between Pacific renewable energy targets and reality — not to reduce the risks of climate change, but rather to reduce Pacific vulnerability to an increasingly shock- and conflict-prone Middle East.

Stephen Howes is director of the Development Policy Centre and professor of economics at the Crawford School of Public Policy at The Australian National University. Rubayat Chowdhury is a macroeconomist with experience working on monetary policy, growth, and economic development in emerging market economies. He is a research officer at the Development Policy Centre. 

Stephen Howes was recently interviewed on this topic for the ABC’s Pacific Beat programme.

Article by AsiaPacificReport.nz

A former Tuvalu prime minister says while the New Zealand government’s oil and gas plans show it is concerned about its economy, he is more concerned about the livelihoods and survival of the Tuvalu people.

Enele Sopoaga — who still serves as an MP in Tuvalu — says the climate crisis is the “main enemy”.

“There is nothing more serious and more important than that.”

His comments come after New Zealand’s Resources Minister Shane Jones said it was “left wing catastrophisation” to suggest that waters would be lapping at towns in Pacific countries as a result of the New Zealand government’s decision on gas and coal.

Vanuatu Climate Change Minister Ralph Regenvanu called on the New Zealand government not to reverse the ban at last year’s Pacific Islands Forum Leaders Meeting in Rarotonga.

“We call on them not to do it to be in line with Paris, in line with the 1.5 degree target. The science says you cannot [make] new fossil fuels,” he told RNZ Pacific in 2023.

Despite this, the current New Zealand government has backed its plans, which Tuvalu is not happy about.

‘It’s going to sink Tuvalu’
“Go ahead and drill and open up new coal mining or get new gas stations,” said Sopoaga, “but don’t forget that whatever you are going to do, it’s going to increase greenhouse gas emissions, which are going to sink the islands of Tuvalu and kill the people.

“It’s just as a matter of fact, as simple as that.”

Jones was asked by RNZ’s Morning Report how New Zealand’s Pacific neighbours would feel about restarting exploration of oil and gas, and the associated environmental impact.

Jones said the Pacific understood Aotearoa needed reliable energy to generate an economic dividend to then be able to contribute to the Pacific region.

“[New Zealand] keeping the lights on and the hospitals functioning, you can’t hold that type of thinking responsible for the tide lapping around Tuvalu. Come on, give us a break,” Jones said.

Sopoaga called the comments “daft” and “naive”.

“I think it’s a completely stupid idea,” he said.

‘Early demise, rising sea levels’
“It’s just logical — the more you open up new gases and the more release of greenhouse gases into the atmosphere will simply cause the early demise and rising of sea levels that will affect the islands of Tuvalu.

“I would appeal to New Zealand to rethink about doing that.”

Sopoaga was prime minister from 2013 to 2019. He was re-elected as an MP in this year’s election and is part of Tuvalu’s 16-member parliament.

He now wants Aotearoa to stick with its ban on fossil fuel exploration, and to also contribute to the cost of adaptation.

Sopoaga said he wanted to remind Jones that “we are working as a global team in the world”.

“Countries cannot just take up their own initiatives, and then go the wrong way.

“[We can not] go with the national interests of countries, we have to discipline ourselves so that we don’t break up and claim that we are doing what the Paris Agreement and Kyoto Protocol are telling us.

“In fact, the Paris Agreement is a legally binding framework, and you cannot just simply say we open up new oil fields in New Zealand and these will not affect the Pacific Island countries.

“This is a stupid idea,” Sopoaga said.

NZ urged to pacify US/China
New Zealand is sending a political delegation on a five-stop Pacific tour next week.

Foreign Affairs Minister Winston Peters has recently spoken about New Zealand’s relationship with China.

“We strongly believe that in a mature relationship like ours it is possible to discuss differences openly, respectfully, and predictably. We will continue to share our concerns with China, where we have them.

“China has a long-standing presence in the Pacific, but we are seriously concerned by increased engagement in Pacific security sectors. We do not want to see developments that destabilise the institutions and arrangements that have long underpinned our region’s security.”

Peters has said he is continuing work started by the previous government to consider partipation in AUKUS Pillar 2, but that New Zealand was a long way from making a decision.

“I think the role of New Zealand is to de-escalate and pacify the situation, talk to China, talk to Australia, talk to the US,” Sopoaga said.

“There is no enemy, their biggest enemy is climate change.

“They are only using this [AUKUS] as a camouflage to move away from responsibility and cause global warming. And they want to ignore their accountability, their responsibility to deal with it,” Sopoaga said.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

The chart above shows Aotearoa New Zealand’s exports and imports of coal. First, note that the emphasis is on timing, not absolute amounts; Imports have a different scale to Exports. Essentially, imports have been around 10% of exports.

It’s also important to note that most Aotearoan coal is exported, while coal used to generate electricity at the Huntly power station is mainly imported. These are two different grades of coal. So it is to be not unexpected that coal imports will have been high at the same times that coal exports also have been high.

And it’s important to note that these data are for values of coal, not volumes. Values will be affected by fluctuations in world coal prices and by fluctuations in the $NZ exchange rate. (Increases in coal exports from 2000 to 2002 will have reflected the historically low exchange rate then.)

Coal exports actually increased after the November 2010 Pike River explosion; that coalfield was still in development in 2010.

Generally, from 2005 to 2012 the export expansion reflected the world market; noting dips for the 2008 global financial crisis, with a subsequent export of stockpiled coal in 2009. During that coal boom period, more than half New Zealand’s coal exports were to India. There was a resurgence of coal exports to India at the end of the 2010s’ decade.

The lull in 2020/21 reflected to Covid19 crisis. Again, we see an exporting of stockpiles after the crisis eased. In 2023 coal exports plummeted, probably a mix of falling world demand as well as falling New Zealand supply. This is a good sign for global transitioning away from coal, though China’s domestic production and consumption of coal will be rising as it transitions from petrol and diesel cars to electric cars. China will be happy to be using fewer imported fossil fuels.

On the import side, New Zealand’s demand for coal from 2003 to 2020 seems to have reflected the global trend, and it will have reflected a lack of growth in renewable energy generation during the later years of the Clark-led Labour-led government. It was under National that the big fall in coal imports took place.

Coal consumption in New Zealand stabilised in the mid-2010s, but resurged again in 2018, again under a Labour-led government; although, to be fair, 2018 and 2019 mainly reflect economic growth rather than the new government’s priorities.

Coal consumption at Huntly in recent years also reflects drought, meaning less hydro-generation of electricity. There is likely to be a lull in coal imports over the next few months, given that the hydro lakes are full, and the El Niño weather forecast is for a strong contribution from wind generation.

My sense is that increased use of electric vehicles – and increased charging capacity – will lead to another temporary resurgence in coal imports. The 2023 quasi-recession, engineered by the Reserve Bank, may however lead to some offsetting reductions in energy demand. My guess, though, is that there will be a short-lived consumption boom in Aotearoa in 2024 and 2025, as high interest rates pull in hot-money from overseas, holding up the $NZ exchange rate, and leading to a further ‘blow-out’ in New Zealand’s current account deficit; a 30.6 billion dollar annual deficit (7.6% of GDP), slightly less than the record high of nearly 9% of GDP earlier this year.

I look forward to hearing about the new government’s plans for expanded renewable electricity generation, and hope that these plans will not mean the loss of wild rivers such as the Mokihinui. Time will tell; soon, in 2024. This government needs ‘runs on the board’ – outcomes, not just proposals – if it is to survive beyond 2026.

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

In this the ninth episode of A View from Afar for 2023, political scientist Dr Paul Buchanan and journalist Selwyn Manning examine why there is a trend toward military dictatorships in North Africa.

And, in particular, Paul and Selwyn analyse the reasons why countries like Sudan, Chad, Niger, Mali, Burkina Faso and Guinea have all become part of a challenge to a weakened western-led global order.

In this podcast, Paul and Selwyn examine why events in North Africa are connected to authoritarian multipolarity, a realignment of global power that favours the Russian Federation’s Putin regime.

And, within this context, Paul and Selwyn address the complexities of Russian Federation involvement in the African continent – involvement that includes the notorious Wagner mercenary group; Russian state controlled energy giants like Gazprom that act as envoys of the Kremlin; and how Western powers appear unable to address geopolitical and terrorist-caused instability in the region.

The Questions include:

• How and why have Africa’s dictators found a powerful ally in the Kremlin?
• Who benefits from the Russian-North African alliance and what does this association look like?
• Where does all of this leave terrorist groups, such as ISIS, in the region?
• Why has Africa become a divide between liberal democratic and authoritarian power blocs in the emerging multipolar global constellation?

INTERACTION WHILE LIVE:

Paul and Selwyn encourage their live audience to interact while they are live with questions and comments.

To interact during the live recording of this podcast, go to Youtube.com/c/EveningReport/

Remember to subscribe to the channel.

For the on-demand audience, you can also keep the conversation going on this debate by clicking on one of the social media channels below:

• Youtube.com/c/EveningReport/
• Facebook.com/selwyn.manning
• Twitter.com/Selwyn_Manning

RECOGNITION: The MIL Network’s podcast A View from Afar was Nominated as a Top Defence Security Podcast by Threat.Technology – a London-based cyber security news publication. Threat.Technology placed A View from Afar at 9th in its 20 Best Defence Security Podcasts of 2021 category.

You can follow A View from Afar via our affiliate syndicators.

In this the ninth episode of A View from Afar for 2023, political scientist Dr Paul Buchanan and journalist Selwyn Manning will examine why there is a trend toward military dictatorships in North Africa.

And, in particular, Paul and Selwyn will analyse the reasons why countries like Sudan, Chad, Niger, Mali, Burkina Faso and Guinea have all become part of a challenge to a weakened western-led global order.

In this podcast, Paul and Selwyn will examine why events in North Africa are connected to authoritarian multipolarity, a realignment of global power that favours the Russian Federation’s Putin regime.

And, within this context, Paul and Selwyn will address the complexities of Russian Federation involvement in the African continent – involvement that includes the notorious Wagner mercenary group; Russian state controlled energy giants like Gazprom that act as envoys of the Kremlin; and how Western powers appear unable to address geopolitical and terrorist-caused instability in the region.

The Questions include:

How and why have Africa’s dictators found a powerful ally in the Kremlin?

Who benefits from the Russian-North African alliance and what does this association look like?

Where does all of this leave terrorist groups, such as ISIS, in the region?

Why has Africa become a divide between liberal democratic and authoritarian power blocs in the emerging multipolar global constellation?

INTERACTION WHILE LIVE:

Paul and Selwyn encourage their live audience to interact while they are live with questions and comments.

To interact during the live recording of this podcast, go to Youtube.com/c/EveningReport/

Remember to subscribe to the channel.

For the on-demand audience, you can also keep the conversation going on this debate by clicking on one of the social media channels below:

• Youtube.com/c/EveningReport/
• Facebook.com/selwyn.manning
• Twitter.com/Selwyn_Manning

RECOGNITION: The MIL Network’s podcast A View from Afar was Nominated as a Top Defence Security Podcast by Threat.Technology – a London-based cyber security news publication. Threat.Technology placed A View from Afar at 9th in its 20 Best Defence Security Podcasts of 2021 category.

You can follow A View from Afar via our affiliate syndicators.

Papua New Guinea began New Year 2023 with sizzling fireworks that lit up the skies.

But our hopes of shrugging off the “power blackout” tag ended just as the year was a few hours old.

An hour into New Year celebrations in the capital Port Moresby, like a perennial remnant, the inevitable popped like a fireworks flare gone bonkers — resulting in an inkiness that lasted into the wee hours of the morning.

Eleven days into the year, black outs are holding businesses and people to ransom across the country, prompting PNG Power Limited CEO Obed Batia to address the root cause of the constant outages.

According to Batia, the reasons range from aging equipment to high rainfall, vegetation that overwhelms power lines, the refusal of customers to allow PNG Power to trim vegetation and access powerlines, and low diesel fuel.

The creepy crawlies like snakes, rats and bats that can spark a major outage by squatting illegally in a transmitter don’t even rate a mention.

Batia said overgrown trees near power lines are some of the biggest contributors to blackouts, and the refusal of customers to allow PPL workers to cut down these trees add to the problem in many parts of the country.

Resisting cutting trees
He said: “Many customers resist PNG Power officers from cutting the trees and clearing of the vegetation within their properties. We are working with external parties to control this.”

Lae PPL office refused to answer questions asked by the Post-Courier about blackouts in Morobe.

In Goroka, a blackout lasted from Jan 6-8 for 48 hours, coming on for only 30 mins and going off again.

Frustrated consumers urged PNG Power to come clear on why the blackout was continuing.

Chamber of Commerce president Chris Anders said the blackout comes as “the risk of having your business or home broken into” had escalated as criminals took advantage of the blackouts, as they normally hit in the early hours of the morning.

“The lack of announcements from PNG Power on what they are doing to fix the power supply is deafening,” Anders said.

PPL said: “The Power Transformer at Himitovi Substation in Goroka which caters for the Goroka load experienced a technical fault on Friday around 2am.

“The issue was rectified at 7pm on Saturday night and power fully restored for Goroka customers.”

Without power for 8 days
Along the North Coast Road in Madang, a community has been without power for eight days with requests receiving responses that never were followed up by PPL.

Batia said that rainfalls have attributed to low water levels at Yonki and Ramu will see continued load shedding in Madang and Highlands while Lae has been assured of supply from Taraka, Mildford Power Stations, Baiune Power Station in Bulolo and the Munum IPP.

“In Port Moresby, recent system outages were experienced due to technical issues between all generation power stations both at PNG Power and the Independent Power Producers (IPPs),” he said.

“We are working together with our IPP stakeholders to ensure we correct those issues with respect grid control and regulation issues, in order to provide stable power.

“All Highlands centres and Madang have their standby power stations which supplement the load.

“There has been little increase in the water level but not to a capacity for the Ramu Hydropower Station to generate to full capacity yet.

Back to normal for Kokopo
“Gazelle grid has stopped load shedding and the system is back to normal for Kokopo, Rabaul and Kerevat customers,” Batia added.

“In all other provincial centres who run on diesel fuel power stations, our challenge is ensuring our fuel suppliers get supply to our power stations on time.

“When there is late supply, our teams resort to load shedding, which is conserving fuel until the next supply of fuel is delivered.

“Discussions are ongoing with our fuel suppliers to ensure we have an understanding on time supply for our diesel power stations.”

Miriam Zarriga is a PNG Post-Courier reporter. Republished with permission.

Article by AsiaPacificReport.nz

Two days after being elected as Prime Minister again in Papua New Guinea, James Marape took his first official trip as the country’s leader while hitting the ground running in groundbreaking clean green energy projects he has been championing over the past two years.

He met with leaders of Fortescue Future Industries (FFI) in Singapore yesterday to progress the talks further.

After numerous questions on the trip to Singapore taken by Marape on Friday afternoon a statement was released about midnight through other social media platforms.

In the morning, the PM’s Department released the statement at 7.30 am after the country became aware of Marape’s trip to Singapore.

The Prime Minister flew to Singapore to continue important trade and investment conversations, including those on Papua LNG, Pasca LNG, Pn’yang LNG and also to get Porgera and Wafi-Golpu sanctioned.

He said from Singapore that FFI had voiced its intention to partner with Papua New Guinea in a big way to harvest clean green energy from both hydro and geothermal sources and to move into solar and wind energy production.

Currently, FFI has identified and set up project sites in Gulf Province for hydro and West New Britain Province for geothermal work and has been working in these areas since the signing of two important agreements since 2021.

Clean green energy way of future
Marape said from Singapore: “With global consciousness of fossil fuel-induced global warming, clean green energy is the way to move into the future and this meeting follows on the head agreement PNG has signed with FFI to progress investment in this energy sector.”

The Prime Minister also visited the PNG High Commission in Singapore with a view to strengthening it further as a trade and investment office while getting the PNG government to increase trade and investment with the ASEAN and APEC countries.

He said: “The Singapore office will be given more support in that context in partnership with Investment Promotion Authority, the Kumul companies, National Fisheries and Forestry authorities, and our Agriculture and Livestock departments so that it coordinates export and trade into the lucrative Asian market of over 2 billion people who need food and energy, and products PNG can mass produce into the future as we are planning under my government.”

Republished with permission.

Article by AsiaPacificReport.nz

Environmental costs are a big deal, which need to be properly factored into our economic decision-making. Last week the Government announced a rebate scheme for electric and hybrid vehicles.

These days we emphasise the very important greenhouse costs arising from the burning of fossil fuels: coal, petrol, gas. But they are not the only ways that urban vehicle use contributes to global environmental degradation. Certainly it is important that New Zealanders make a contribution to the emission-reduction endeavour, at least in proportion to the influence of greenhouse gases on global environmental harm. Changing the ways we own and use private vehicles represents an important outcome, to which good policymaking can make a valuable contribution.

In cities and towns, the problem is a mix of the overuse of private motor vehicles, and the use of vehicles that are overspecified for the tasks they are required to perform. The high-tech solution just announced in New Zealand is to transition to an all-electric fleet; with 2035 being designated as the year in which the import of non-electric new urban vehicles will be prohibited, with a view to New Zealand having an all-electric fleet by around 2050. The important new policy to accelerate the promoted transition will be a subsidisation of electric and low-emission vehicles, combined with a tax on high-emission vehicles.

In my view, this represents an overreliance on a particular technology that presently contributes as a niche solution, but is untested at scale. It represents a strategy by which one technology is replaced by another, whereas a more robust outcome might involve more variety of technologies, and better incentives to use existing technologies more efficiently. Indeed, there is too little emphasis on low-tech contributions that can be implemented in 2021 or 2022.

Public Transport

We should note that countries operating at pandemic emergency levels need to emphasise both minimisation of urban travel, and other measures – vaccination, physical distancing, and mask use – that minimise opportunities for indoor airborne transmission of pathogens between people from different households. Public transport here constitutes a public indoor space; so, under these conditions, there will necessarily be a preference for private transport. However, this preference for private transport in a pandemic will be offset by significantly less overall movement of people.

It is important that, when countries are not at pandemic emergency levels – and New Zealand is not currently at a domestic emergency level (it does continue to have a pandemic emergency at its international border) – all incentives to prefer private over public transport are discontinued; even reversed.

New Zealand at present has a permanent requirement for passengers to wear facemasks when using public transport. And the consequences are obvious, at least in Auckland. While traffic congestion is noticeably worse than it was in 2019, buses and trains are noticeably more spacious, with empty buses still a common sight all over the city.

New Zealanders of all ethnicities have revealed an unsurprising preference to not wear masks (except when there is a current outbreak of Covid19), and to only use masks when required to by law. New Zealanders don’t like wearing masks. Indeed, it was quite strange visiting Middlemore Hospital last month, which has a train station outside its main entrance. The only masks I saw in the hospital were those being worn by people heading out the front door, to catch a train.

The mask mandate makes public transport consumption a more costly experience than it would otherwise be; in part because New Zealanders don’t like wearing facemasks, and in part because it signals to the public at large that buses and trains are inherently unhealthy – indeed dangerous – places. Auckland’s public transport has improved markedly this century, though buses had a taint, even before Covid19, of being ‘loser movers’. That taint has been majorly exacerbated during covid times.

When there are twenty percent more cars on urban roads than there need to be, then greenhouse emissions are likely to be raised by fifty percent; that’s because of the stop-start nature of traffic congestion. So the first thing authorities can do to reduce greenhouse emissions from car use is to discontinue the mask mandate, except as an emergency measure. Other incentives to use public transport – including temporary incentives – may also be helpful, to help redress its ‘loser mover’ taint.

(Of course any incentives for workers to take sick leave when sick, or to work from home periodically, need to be retained. Also, people should be encouraged to wear facemasks if they are experiencing conditions such as hay fever; conditions which could be construed by fellow passengers as covid or influenza. The general principle is that buses and trains and ferries should become happy, normalised, family-friendly public spaces.)

It’s also important to note that interruptions to the normal flow of low grade ‘seasonal’ viruses – infections such as ‘common colds’ – may have unanticipated consequences. These viruses may provide substantial (albeit incomplete) immunity to more serious viral infections; we do not know, in large part because our public health people are not asking this question. (We should note that vaccinations themselves can be regarded as protective low-grade infections.) Thus, by disturbing the normal flow of low grade pathogens – such as the cold viruses we have adapted to – we are participating in a social experiment. In New Zealand over the last nine months, hospitalisations have increased for what were otherwise rare respiratory disorders; and excess deaths in New Zealand have been comparable with those in European countries with active Covid19 outbreaks.

Public transport use is a critical component of greenhouse emissions’ reduction.

Subsidies and Small Cars

Subsidies (‘carrot’ incentives) are generally more effective than taxes (‘stick’ disincentives’). They work by leading more people into making those choices that have collective benefits. And they fit the wider (‘zero-sum’) principle of public finance that requires private financial surpluses to be offset by public financial deficits. (In this context, just as responsible governments understand that small countries are not excused from contributing to the global good through greenhouse emission reductions, so all countries’ governments need to contribute by running public sector financial deficits to offset unsustainable private sector financial behaviours. This means that ‘we do not have enough money’ is not a valid governmental excuse for inaction or for under-action.)

First, governments need to subsidise surgical-grade facemasks for people with conditions that make them high risk to acquiring respiratory infections in public places. This allows such compromised people to mingle in public spaces without imposing illiberal mandates on the general public.

Second, small cars emit fewer greenhouse gases than large cars. Not only should governments subsidise small safe low-emission petrol vehicles, but they should encourage households who genuinely require larger family vehicles to acquire such small vehicles as their ‘second’ car. And to default to their smaller vehicle whenever they are on runabout duty with one to four occupants; thus, the smaller vehicle should rightly be called the ‘first car’ of a household.

The vehicle I mainly drive now is a 2003 Honda Jazz, which is still fuel efficient, can act as a mini utility vehicle when circumstances require it, and, over the last summer, effortlessly ran a return trip from Auckland to Cromwell.

The other benefit of city residents and townspeople driving small cars like this as their default option is that the roads become safer. Collisions are more likely than at present to be between two small vehicles, and thereby less likely to cause major injury or death.

By all means we should subsidise small electric vehicles as part of this mix. But, we should note that most small vehicles will not be garaged at night – because they are owned by mainly younger people without a garage, because a bigger family vehicle is in the garage, or because of the modern trend to use garages more as storage units for household affects than as homes for cars – and that plugin electric vehicles parked on the street at night cannot easily be charged.

Family Vehicles

Larger vehicles – especially vans and people movers – do play and will continue to play an important role in our vehicle mix. The answer here would be to emphasise (and subsidise) hybrid technology, now well established. These vehicles are particularly useful for large families, and for many businesses.

What we want is to minimise the inappropriate urban use of ‘utes’ and SUVs. Indeed, in recent years four-door utility vehicles – in most cases a form of truck – have become a status symbol, to some extent displacing SUVs. These are vehicles best suited to rural use – eg by farmers. Petrol or diesel ‘utes’ should be subject to a large-car tax (indeed a large car-tax), which can be rebated to legitimate users for whom these are a valid business cost. They should continue to be available to rich city-folk who need to tow their recreational boats to Pauanui or Whangamata, so long as they pay the large car tax. And, they should be exempted the tax if they buy an electric ute or SUV instead of a ‘gas guzzler’; incentives should apply at all price points.

Electric Vehicles

All EVs, including bikes, should be eligible for transition subsidies. The aim however should not be to switch to fully electric fleets; we need diversity and efficiency, rather than vulnerability. Thus a small EV is clearly better than a big EV, for typical city runabout use.

We should note that, in New Zealand this year, more electricity has been generated by burning coal than in any of the previous ten years. This may be partially a consequence of climate change; more droughts, meaning less water available to generate hydroelectricity. Thus, a mass switch from oil-based fuels to electricity might end up being, substantially, a switch from petrol to dirtier coal; not exactly what the policy is intended to achieve.

Considering vulnerability, we need to note that modern electric vehicles require scarce raw materials, such as rare earth metals, which are substantially sourced from China; and massive amounts of other increasingly scarce metals, such as copper. (See Al Jazeera‘s The Dark Side of Green Energy.) At a time that one ‘conversation’ is leading western countries to distance themselves from China, another conversation may be leading us go become more dependent on Chinese sourced materials. And the environmental costs to these mining regions in China is comparable to the political costs being faced by some other communities in China.

Another really big issue is that of e-waste. It’s important that the cost of any vehicle – including electric vehicles – is fully inclusive of the costs of reusing, recycling, or otherwise disposing of end of life vehicles (and vehicle components such as batteries and tyres). One aspect of this is to avoid a transition process which makes many still good vehicles prematurely obsolete. Policymakers need to take a global perspective on this. Countries like New Zealand – which traditionally import many used vehicles – need to continue importing quality low emission used petrol vehicles – to ensure that a sound global vehicle ecology is maintained.

Rental Vehicles

It is common for us to rent tools (eg trailers) and power machinery; otherwise these items that we own spend most of their time idle. We can treat passenger vehicles in much the same way. So, while it is good for young people to learn to drive – and gain drivers’ licences – that does not mean they need to own a car, not even a small car. They can rent cars – preferably small cars – for weekend and longer trips. Quality rental housing within walking distance of main employment and transport nodes, combined with a reliance on rental vehicle options for irregular travel, can form the basis for an affluent but uncluttered life; an eco-life.

Likewise, ‘nuclear’ households of four or fewer people should be able to comfortably get by with one small private vehicle, renting a larger vehicle whenever irregular vehicle requirements occur.

A green society needs fewer vehicles that each do many kilometres in one year. In that way, the vehicles will wear out as the technology becomes obsolete; ie ideally a car should do 200,000 km (or more) in a fifteen-year life.

Technological Transition

Electric vehicles, used at scale, represent an unproven option with many potential unaddressed and unintended consequences. The only comparable wholesale transition is that from steam to oil, and that took eighty or so years, with the best steam engines being built in the 1950s.

One of the most interesting transitions in transport technology was that of sailing ships giving way to powered ships. The transition lasted over 100 years, with Norway in particular improving the technology of commercial sailing ships into the twentieth century. New Zealand is particularly well-adapted to sailing ships, because it represents the half-way point of the great circle circumnavigation route. There is a reason why the westerly winds in the Southern Ocean are called ‘trade winds’. The last of the commercial windjammers was the Pamir, which last sailed out of Wellington in 1948. Sailing ships, in their context, are much more eco than electric cars. May we see a reintroduction of sailing ships into the mix?

We can learn from this last episode, by using multiple technologies simultaneously, and letting markets (which properly cost what they supply) determine the outcomes; and focussing on the bigger ecological picture, that less is more.

We need to remove disincentives to the use of public transport. And we need to promote the intensive use of small private vehicles wherever and whenever they are sufficient to the tasks people require of them.

————-

Keith Rankin, trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

contact: keith at rankin.nz

The past year is one that few of us will forget. While the impacts of the COVID-19 pandemic have played out unevenly across Asia and the Pacific, the region has been spared many of the worst effects seen in other parts of the world. The pandemic has reminded us that a reliable and uninterrupted energy supply is critical to managing this crisis.

Beyond ensuring that hospitals and healthcare facilities continue to function, energy supports the systems and coping mechanisms we rely on to work remotely, undertake distance learning and communicate essential health information. Importantly, energy will also underpin cold chains and logistics to ensure that billions of vaccines make their way to the people who need them most.

The good news is our region’s energy systems have continued to function throughout the pandemic. A new report Shaping a sustainable energy future in Asia and the Pacific:  A greener, more resilient and inclusive energy system released today by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) shows the energy demand reductions have mainly impacted fossil fuels and depressed oil and gas prices. Renewable energy development in countries across the region, such as China and India, has continued at a healthy pace throughout 2020.

As the Asia-Pacific region transitions its energy system to clean, efficient and low carbon technologies, the emergence of the pandemic raises some fundamental questions. How can a transformed energy system help ensure our resilience to future crises such as COVID-19? As we recover from this pandemic, can we launch a “green recovery” that simultaneously rebuilds our economies and puts us on track to meet global climate and sustainability goals?

A clean and sustainable energy is central to a recovery from COVID-19 pandemic.  By emphasizing the importance of the SDGs as a guiding framework for recovering better together, we must focus on two critical aspcets:

First, by making meaningful progress on the SDGs, we can address many of the systemic issues that made societies more vulnerable to COVID-19 in the first place – health, decent work, poverty and inequalities, to name a few.

Second, by directing stimulus spending to investments that support the achievement of the SDGs, we can build back better. If countries focus their stimulus efforts on the industries of the past such as fossil fuels, we risk not creating the jobs we need, or moving in the right direction to achieve the global goals that are critical to future generations. The energy sector offers multiple opportunities to align stimulus with the clean industries of the future.

The evidence shows that renewable energy and energy efficiency projects create more jobs for the same investment as fossil fuel projects. By increasing expenditure on clean cooking and electricity access, we can enhance economic activity in rural areas and bring modern infrastructure that can make these communities more resilient and inclusive, particularly for the wellbeing of women and children.

Additionally, investing in low-carbon infrastructure and technologies can create a basis for the more ambitious climate pledges we need to reach the Paris Agreement targets of a 2-degree global warming limit. On this note, several countries have announced carbon neutrality, demonstrating a long-term vision and commitment to an accelerated transformation to sustainable energy. Phasing out the use of coal from power generation portfolios by substituting with renewables, ending fossil fuel subsidies, and implementing carbon pricing are some of the steps we can take.

The COVID-19 crisis has forced us to change many aspects of our lives to keep ourselves and our societies safe. It has shown that we are more adaptive and resilient than we may have believed. Nevertheless, we should not waste the opportunities this crisis presents for transformative change. It should not deflect us from the urgent task of making modern energy available to all and decarbonizing the region’s energy system through a transition to sustainable energy. Instead, it should provide us with a renewed sense of urgency.

We must harness the capacity of sustainable energy to rebuild our societies and economies while protecting the environment in the pursuit of the 2030 Agenda for Sustainable Development.

Armida Salsiah Alisjahbana is Under-Secretary-General of the United Nations and Executive Secretary of ESCAP

Papua New Guinea’s former Prime Minister, Peter O’Neill, has been committed to stand trial for charges of misappropriation and official corruption

A Waigani Committal Court magistrate Tracey Ganaii yesterday found there was sufficient evidence on the two charges.

They relate to the state purchase of two generators from Israel seven years ago when O’Neill was prime minister.

Police allege that O’Neill directed payments for the purchase without proper procurement and tender processes, or parliamentary approval.

O’Neill told media outside court that he welcomed the chance to defend the case.

“There was no personal benefit on my part in this case. But there is a suggestion by some of the witnesses that it was official corruption and misappropriation of unbudgeted items. But we have not presented our evidence in court, which we will do in the National Court.”

O’Neill previously defended the US$14 million purchase of the generators as being a necessary step to addressing chronic electricity blackouts experienced in PNG’s main cities of Port Moresby and Lae.

PNG’s parliamentary opposition filed a police complaint about the purchase in early 2014.

The former prime minister insisted that the decision was approved by his cabinet, the National Executive Council.

“Largely, this is a NEC-endorsed decision. The purchase was endorsed by NEC.

“The court thought that there has been differences of timing, and there was sufficiency of that to bring the matter up to the National Court, and we look forward to defending it there.”

This article is republished by the Pacific Media Centre under a partnership agreement with RNZ.

Article by AsiaPacificReport.nz

Former Prime Minister Peter O’Neill says the National Executive Council of the then Papua New Guinea government approved the purchase of two heavy duty power generators for PNG Power to solve longstanding blackouts in Lae and Port Moresby.

The allegation against him is that due process was not followed to enable PNG Power to fix this the blackout emergency, he says in a statement.

O’Neill said the case was “highly politicised” and that it had been “influenced and pushed by dark and shadowy figures” behind the scenes wanting to force an arrest.

READ MORE: Other reports on the former PM’s arrest

O’Neill was arrested on Saturday when he arrived back in the country at Jackson’s International Airport after being stranded in Brisbane due to a covid-19 coronavirus lockdown.

He was questioned by PNG police and charged with misappropriation, official corruption and abuse of office and was released on K5000 bail.

O’Neill blamed current Prime Minister James Marape as he had been Finance Minister at the time and had allegedly signed the instrument exempting the process to allow PNG Power to enter into a contract to purchase the generators.

O’Neill questions police independence
O’Neill said if the police were truly independent, charges should be also laid against Marape for not following the process.

Prime Minister James Marape had recently posted on his social media page assuring the nation that the work of the police would not be impeded by him as Prime Minister in the face of many allegations, including himself.

He made the statement due to a purported copy of a Section 61 instrument being released into the public domain and allegations that he was a “player” in the saga.

Marape said he would offer his statements as a state witness and would never use the office of prime minister to stop or encourage police not to carry out their constitutional duties.

In relation to O’Neill’s arrest, Marape said the former leader was innocent until proven guilty.

Article by AsiaPacificReport.nz

Papua New Guinea’s former Prime Minister Peter O’Neill was granted bail last night at the Waigani National Court after being arrested by police over his alleged role in the 50 million kina (US$14 million) purchase of two generators from Israel, reports the PNG Post-Courier.

The court after granting bail ordered that he must pay K5000 before close of business tomorrow.

Further orders were that he remained at his Touaguba Hill residence self-isolated until June 2 when the covid-19 coronavirus state of emergency lapses.

READ MORE: Al Jazeera coronavirus live updates – Guatemala angry over covid-19 infected deportees from US

He was arrested at Jackson’s International Airport in Port Moresby by police yesterday afternoon over allegations of abuse of office and corruption.

Assistant Commissioner Crimes Hodges Ette confirmed that O’Neill was brought in for questioning at the Fraud Squad office in Konedobu upon his return from Brisbane, Australia.

ACP Ette said that all covid-19 protocols were strictly observed when O’Neill was brought in for questioning.

Israeli generators deal allegations
Police allege that:

• O’Neill directed payments for the purchase of the two generators from Israel without due consideration for procurement processes as required under the Public Finance Management Act as purchase of the two generators was not approved by the National Parliament; the purchase did not go through tender processes;
• there was no legal clearance from the State Solicitors for such payment; and
• O’Neill directed the National Executive Council to convene and approved the payment of K50 million for the generators after the purchase was made.

Ette said there was “reasonable evidence of misappropriation, abuse of office and official corruption”.

ABC Radio Australia reports that O’Neill led Papua New Guinea for seven years, before quitting in 2019 after a string of high-profile resignations from his government.

Police attempted to arrest O’Neill in October last year over a different issue.

He denied any wrongdoing and said it was a “political witch hunt”.

Police withdrew that warrant after O’Neill challenged its validity in court.

Article by AsiaPacificReport.nz

Papua New Guinea’s former Prime Minister Peter O’Neill has been arrested after arriving back in the country.

Police say O’Neill was arrested on suspicion of misappropriation, abuse of office and official corruption, regarding the purchase of two generators from Israel.

The Police Assistant Commissioner of Crimes, Hodges Ette, confirmed the MP was brought in for questioning yesterday afternoon in Port Moresby after flying in from Australia where he has been for much of the year.

READ MORE: Al Jazeera coronavirus live updates – Far-right protests in Spain over lockdowns

While anti-fraud police investigators have sought him for questioning for months, O’Neill was reportedly unable to return to PNG since March when border closures were implemented as part of the country’s covid-19 state of emergency.

The allegations against the Ialibu-Pangia MP relate to a purchase he made as prime minister in 2013 involving two 15-megawatt generators for PNG from an Israeli company, LR Group.

PNG’s parliamentary opposition filed a police complaint about the purchase in 2014.

Police allege that O’Neill directed payments for the purchase of the two generators from Israel without due consideration for procurement processes as required under the Public Finance Management Act.

Purchase not approved
The purchase of the two generators was not approved by the national Parliament, while police allege that the purchase did not go through required tender processes, nor was there legal clearance from the State Solicitors for such payment.

O’Neill is alleged to have directed the National Executive Council to convene and approve the payment of 50 million kina (US$14 million) for the generators after the purchase was made.

Ette said there was reasonable evidence for misappropriation, abuse of office and official corruption.

The former prime minister, who lost power to incumbent prime minister James Marape a year ago, is being allowed bail.

He is expected to be quarantined at his own residence for the next 14 days after the interview, as required under PNG’s covid-19 emergency measures for all citizens repatriating.

• This article is republished by the Pacific Media Centre under a partnership agreement with RNZ.
• If you have symptoms of the coronavirus, call the NZ Covid-19 Healthline on 0800 358 5453 (+64 9 358 5453 for international SIMs) or call your GP – don’t show up at a medical centre.
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Article by AsiaPacificReport.nz

As it seeks to diversify its sources of fuel, India is looking to get in on the ground floor of coal mining in previously unexploited deposits in Indonesian-ruled Papua.

In exchange for technical support and financing for geological surveys, officials say India is pushing for special privileges, including no-bid contracts on any resulting concessions  a prospect that could run foul of Indonesia’s anti-corruption laws.

The details of an Indian mining project in Papua are still being negotiated, but Indonesia’s energy ministry welcomes the prospect as part of a greater drive to explore energy resources in the country’s easternmost provinces.

READ MORE: Strategic partnership between India and Indonesia

In future, the ministry hopes mining for coking coal will support the domestic steel industry, while also bringing economic benefits to locals.

Rights activists, however, fear the launch of a new mining industry could deepen tensions in a region where existing extractive projects have damaged the environment and inflamed a long-running armed conflict.

Indonesia’s new coal frontier
When Indian Prime Minister Narendra Modi visited Jakarta last month, joint efforts to extract and process Indonesia’s fossil fuels, including coal, were on the agenda.

India’s interest in investing in a new coking coal mining concession in Papua can be traced to 2017, when officials from the Central Mine Planning and Design Institute (CMPDI) and Central Institute of Mining and Fuel Research (CIMFR), both Indian government institutes, met with Indonesia’s Ministry of Energy and Mineral Resources in Jakarta.

The bilateral plan was announced by then-ministry spokesman Sujatmiko after the first India Indonesia Energy Forum held in Jakarta in April 2017. “The focus is on new territories in Papua,” he said.

To follow up, the Ministry of Energy and Mineral Resources sent a team to India in early May. The current energy ministry spokesman, Agung Pribadi, who was part of the delegation, told Mongabay that officials from state-owned energy giant Pertamina, major coal miner PT Adaro Energy, and state-owned electricity firm PLN also joined the meeting.

The Indonesian team presented research outlining the potential for mining high-caloric content coal in West Papua province, and lower-caloric coal in Papua province.

According to the team’s report, only 9.3 million tons of reserves have so far been identified. By contrast, Indonesia as a whole expects to export 371 million tons of coal this year. However, the true extent of coal deposits could be larger, said Rita Susilawati, who prepared the report presented during the meeting and is head of coal at the ministry’s Mineral, Coal and Geothermal Resources Centre. “Some areas in Papua are hard to reach due to the lack of infrastructure. We were unable to continue the research,” she explained.

During the visit, Indian and Indonesian officials discussed conducting a geological survey in Papua, Agung said. India would finance the survey using its national budget. With Indonesian President Joko Widodo prioritising infrastructure investment, the energy ministry has few resources to conduct such surveys.

Expected privileges
Indonesia also anticipates benefiting and learning from India’s experience in processing coking coal.

In exchange, India expected privileges from the Indonesian government, including the right to secure the project without a bidding process, Agung said.

Indonesia denied the request, and the talks were put on hold. Approving it would have been too risky, Agung said, since the bidding process is regulated in Indonesia. “We recommend they follow the bidding process or cooperate with a state-owned enterprise,” Agung said.

India’s ministry of coal did not respond to an emailed request for comment.

Energy and mining law expert Bisman Bakhtiar said there was still a chance India could get the rights to develop any resulting coal concessions without having to go through an open bidding process. “It can proceed under the G-to-G (government-to-government) scheme by signing a bilateral agreement,” he said.

This form of agreement would supersede the ministerial regulations requiring competitive bidding, Bisman explained, although he said any such agreements should emphasise that any projects must be carried out according to local laws.

There is precedent in Indonesia for G-to-G schemes bypassing the open bidding process, Bisman said. For example, multiple projects have been carried out on the basis of cooperation agreements with the World Bank and Australia. In another instance, Indonesian media mogul Surya Paloh imported crude oil from Angola via a bilateral cooperation agreement with Angola’s state-owned oil company Sonangol.

Draft law
A draft law currently being discussed in the House of Representatives could also smooth the path for India. It says that if there is agreement between Indonesia and a foreign government to conduct geological studies, the country involved will get priority for the contract.

However, this would still require the country to meet market prices. “We called it ‘right to match.’ If there are other parties who offer lower prices, then they should follow that price,” Bisman said.

Another option would be for India to appoint one of its local companies to work with Indonesian private sector giant Adaro or state-owned coal miner PT Bukit Asam. Such a deal could be conducted as a business-to-business (B-to-B) agreement, and would be legal according to Indonesia’s Energy Law.

Or, Indonesia could assign a state-owned firm like Bukit Asam to work with India based on a memorandum of understanding (MOU) signed by both countries.

“But all these options have a potential risk,” Agung said. “They can be categorised as collusion by the Corruption Eradication Commission (KPK).” He said a conventional bidding process should be prioritised.

Bisman said India needed to consider other risks, such as the social and political situation in Papua. The region is home to an armed pro-independence movement and has faced decades of conflict around the world’s largest and most profitable gold and copper mine, Grasberg, owned by US-based Freeport McMoRan.

‘Land grab’
Despite the presence of the mine, Papua remains Indonesia’s poorest province, with some of the worst literacy and infant mortality rates in Asia. Indonesia’s National Commission on Human Rights (Komnas HAM), a state-funded body, has characterised Freeport’s concession as a “land grab,” for which the original stewards of the land, the Amungme and Kamoro indigenous people, were never properly consulted or compensated.

The Indonesian energy ministry’s own research says that any project must take into account the impact on Papua’s indigenous peoples, and must factor in specific local concepts of land ownership, leadership and livelihood.

Franky Samperante, executive director of rights advocacy group Yayasan Pusaka, said he was worried about the plan. “It is way too risky,” he said, pointing to the social and environmental fallout of the Grasberg mine.

“There should be communication between the mining company and indigenous Papuans,” he said, warning Jakarta to carefully calculate the social, environmental and national security impacts.

Local indigenous people need to be meaningfully involved in the decision-making process, he said, especially since the mining would occur in and near forests where indigenous people live and gather and hunt their food.

Article by AsiaPacificReport.nz