Gareth Renowden – Evening Report

Cindy Baxter on Coal, climate change, and the New Zealand economy: winners, losers, and long-term users

Selwyn Manning — Wed, 19 Aug 2015 01:53:40 +0000

MIL OSI – Source: Hot Topic – By Cindy Baxter – Analysis published with permission of Hot-Topic.co.nz Cross-posted from Coal Action Network Aotearoa As the country reeled with the news last week that Solid Energy had gone into administration with a $300m debt, another event was happening in the Pacific that puts the debate in a context that it too seldom receives in New Zealand. On Thursday, Kiribati Prime Minister Anote Tong wrote to world leaders calling for a moratorium on new coalmines. “Kiribati, as a nation faced with a very uncertain future, is calling for a global moratorium on new coal mines. lt would be one positive step towards our collective global action against climate change and it is my sincere hope that you and your people would add your positive support in this endeavour,” he wrote. “The construction of each new coal mine undermines the spirit and intent of any agreement we may reach, particularly in the upcoming COP 21 in Paris, whilst stopping new coal mine constructions NOW will make any agreement reached in Paris truly historical.” UK Economist Sir Nicholas Stern agreed: “The use of coal is simply bad economics, unless one refuses to count as a cost the damages and deaths now and in the future from air pollution and climate change,” he told Reuters (Stern’s full statement here). In June, Pope Francis said in his encyclical that the use of “highly polluting fossil fuels needs to be progressively replaced without delay.” Has John Key received his letter from President Tong? How will he reply? His Government has done nothing to try to reduce our coal production in an effort to reduce emissions because of concerns about climate change. Its mismanagement of Solid Energy is testament to its ongoing faith in the coal industry. Only last month Energy Resources Minister Simon Bridges told a West Coast meeting “we can have confidence that in the medium to long term, [coal] demand will return.” Right now, Solid Energy’s assets are being eyed by national and international buyers, including the permits Solid has for as-yet-undeveloped new mines.

What are the options for Solid Energy’s assets?

There are rumours that Indian coal giant Adani might buy the West Coast coking coal mines, but Adani is not in the business of coking coal. Its proposed (thermal) Carmichael mine in Queensland’s Galilee Basin is in trouble, as both the Commonwealth Bank of Australia, and British bank Standard Chartered, have walked away from the project, which would threaten the Great Barrier Reef where a new coal terminal is planned. There’s talk that the Stevenson Group may be interested in some of Solid’s domestic thermal coal assets. This is the company that lost its contract operating for Bathurst Resources in Takitimu, Southland, because of Worksafe health and safety concerns, and is looking at opening a new mine on the West Coast. Ironically, Bathurst Resources itself is also reported to be interested in Solid Energy’s Southland mines. It is desperately trying to keep itself afloat through domestic coal sales, while it waits in vain for the coking coal prices to rise again so it can sell its coal from the Denniston mine.

International coal: a dismal future

But while the vultures circle Solid Energy, what’s happening around the world? Banks have been hit by a failing coal industry from which an increasing number of financial institutions – such as the huge Norwegian Sovereign Fund – are walking away – divesting itself of $8bn of investments in coal. The Fund already divested from Bathurst Resources last year. Some may scoff that this is merely “activist” divestment, but struggling US coal giant Peabody Energy is serious about it. In its 2014 annual report (page 30), the company says: “The impact of such efforts may adversely affect the demand for and price of securities issued by us, and impact our access to the capital and financial markets.” Last Thursday, Goldman Sachs sold the last of its coal investments, exiting the coal business altogether. This week Goldmans has backed a new, $1 billion renewable energy venture with SunEdison. Back in NZ, TSB, stung by its Solid Energy hit, appears to think its investments in SOEs needs to be reviewed – perhaps it would be wiser to review its investments in coal. In Queensland, Australia, a mothballed coalmine previously worth AUD$624m recently changed hands for a dollar. This recent Bloomberg graphic shows the sorry tale of how a global glut of coking coal and slowing steel demand in China is hammering the coking coal industry. The market may never pick up as the downturn in China’s steel use continues (and Chinese steel floods the internataional market) and it turns to its increasing stockpile of scrap steel. In the US, coal companies are in dire straights, with the share prices of its biggest companies: Peabody, Arch, and Alpha coal at rock bottom, with Alpha filing for a “chapter 11” bankruptcy status, following the way of dozens of smaller companies.

Genesis Energy uses the get-out clause

It’s not regulation that’s killing King Coal, to quote former Mayor of New York Michael Bloomberg: “But the fact remains that King Coal is dying of natural causes: Market forces, technological advances, and public demands for clean air and climate action have combined to make alternative sources of energy more financially attractive.” That’s definitely the case for Genesis, which has now announced it’s going to shut down the dirty old coal-fired units at Huntly (something it forecast in 2009). This was a no-brainer for the company – the units were built in the 70s and, with the price of renewables coming down further, they don’t need to burn coal any more. Genesis is somewhat cynically capitalising on the clause in its contract with Solid Energy to get out of its future contracts with the company. It doesn’t need any more coal – it has a 700,000 tonne stockpile to burn, and renewables and gas are cheaper.

The climate warms, the seas rise, but Fonterra keeps digging

At that West Coast meeting last month, Simon Bridges was upbeat about coal’s use in New Zealand. He said:

“Coal is still a major source of energy for industry in the South Island, including being used to heat schools and hospitals. The demand for coal to fuel more dairy processing has strengthened our domestic market.”

Given that Fonterra’s coal use has risen 38% since 2008, he is not wrong about that being the source of strength in the domestic market. And the Government hasn’t lifted a finger to slow this use on behalf of the climate, and will no doubt soon be reporting increased emissions from coal use in New Zealand. We have no cap on our ETS and the Government subsidises any big emitters for their emissions – including Fonterra, which, in the absence of Huntly, will “step up” to become New Zealand’s second largest coal user. The climate change impacts that Kiribati President Tong is talking about are not limited to Kiribati. We’re heading into a monster El Nino, and the impacts are already being felt around the planet. Ocean temperatures in the Western Pacific are at an all time high. Last month, 1000 people died in an Indian heatwave; in Myanmar, they’re bracing for further floods after 1.3 million people were displaced last week. Whanganui is just beginning to recover from its terrible floods, and Agriculture Minister Nathan Guy just added $100,000 to the Government’s assistance for drought-ravaged North Canterbury farmers, and extended the drought declaration through until February.

We need to reduce our reliance on coal, both in the export markets and domestically. We need to listen to our Pacific neighbours. And if the New Zealand coal industry’s losers and long-term users won’t listen, then they need to be made to hear.

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Hot Topic: A tale of two hemispheres

Selwyn Manning — Tue, 28 Jul 2015 00:25:03 +0000

Hot-Topic.co.nz Headline: A tale of two hemispheres At the end of June, Professor Jim Renwick of Victoria University gave his inaugural lecture. As you might expect of a climate scientist, it concerns what we know about the climate system and where we’re heading. He pulls no punches. Jim has been kind enough to put together a text version of the lecture for Hot Topic: it follows. You can watch the full lecture, with accompanying slides, on the video embedded at the end of the post. We live in a golden age of earth observation. With a few clicks of a mouse on a web browser, any of us can see the state of the global ocean surface, the current condition of the Greenland ice sheet, how much rain is falling in the tropics today, and on and on. Plus, the International Space Station (ISS), and a series of satellites such as MODIS give us wonderful images of our home planet. The climate science community can tell, with unprecedented coverage and timeliness, just what is going on in the climate system. It is a great time to be a climate researcher, but also a worrying time, in both cases because we can see exactly what is changing. One thing the ISS pictures emphasise is just how thin the atmosphere is, a thin blue layer between the solid earth and the blackness of space. Not only is this life-supporting envelope very thin, some of the key gases in the atmosphere are there in only trace amounts, so we can change the properties of the atmosphere easily, by targeting the right gases. The discovery of the ozone hole 30 years ago brought this home with a bang. And we’ve found that build-up of carbon dioxide (CO₂) in the atmosphere can have a profound effect on the climate system, right down to the bottom of the oceans. Carbon dioxide is important because it’s a crucial control on the surface temperature of the earth. It is very good at absorbing heat (infrared radiation) welling up from the earth, then re-radiating both up and down, in the process warming the earth’s surface. The effect is very like a blanket put on a bed – what’s under the blanket warms up. More CO₂ is like putting another blanket on the bed and less is like taking away a blanket. No CO₂ and the earth freezes – temperatures like we had in the South Island in late June would be the norm everywhere, all the time. While there are several other “greenhouse gases”, carbon dioxide is the most important since it stays in the atmosphere so long, hundreds to thousands of years. Since direct atmospheric measurements began in the late 1950s, CO₂ concentrations have gone from 315 ppm to about 400ppm (0.04%) now. Concentrations of CO₂ are rising steadily, but the numbers hardly sound “dangerous”. But one thing to realise is that many natural changes take place over thousands to millions years. So instead of human time scale of the last 60 years, we must look on the planetary time scale… Luckily, ice cores store bubbles of ancient air that can tell us what CO₂ concentrations were, far back in time. If we join the ice core record up with the observations from Hawaii, we get a very different picture – and now it does look alarming! CO₂ in the atmosphere has increased blindingly fast, by planetary standards. We have really put a lot of it up there in a handful of decades. For many thousands of years before the present, back to the beginnings of agriculture and modern civilisation, CO₂ concentrations have been fairly steady, between 260 and 280ppm. Suddenly (in geological terms) they are 40% higher at around 400ppm. So, how far back do we have to go to find the last time CO₂ was this high? The answer is about 3 million years. We are making changes in decades that left to its own devices, the earth system might take hundreds of thousands of years to effect. Back then, in the “mid-Pliocene warm period”, temperatures were around 2-3°C higher than present, but sea levels were around 20m higher. That much sea level rise takes time, but it will happen again if we allow CO₂ levels to stay up there. How do we know about what was in the atmosphere 3 million years ago? From the chemistry of rocks – no ice core goes back far enough so we must look at the chemical composition of the rocks laid down then, as they carry the fingerprint of the chemical composition of the atmosphere. That is, we can read it in the earth itself. The flip side of this is that sediments being formed today will tell the story of today’s big CO₂ spike. In other words, our actions today are being written into the crust of the earth and will be visible for millions of years to come, if there are any able to read it. But what about what happens in our lifetimes, what’s happening now? The geological record is no help there – we must just experience it as we go. Global mean temperatures are going up, just what we’d expect from increased carbon dioxide levels. Things are simple at that level: more CO₂ = higher temperatures. But climates vary strongly around the world, and so does climate change, as a result of geography, latitude, land mass size and so on. For example, surface temperatures are changing at wildly different rates in different places. Over the last 60 years or so, the global average warming has been around 0.6°C. The Arctic has seen much more and the southern oceans and Antarctica much less. This brings up the issue of “Polar amplification”, the observation from the geological and paleoclimate record that both poles always warm or cool about twice as much as the global average. This is visible for the cooling at the last glacial maximum, and for the warming during the mid-Pliocene warm period. We know from the past that this always happens, but we are now learning that the two poles do not respond at the same rate. The Arctic, with its thin layer of sea ice and snow, can warm quickly. The Antarctic, with its massive ice sheets and turbulent circumpolar ocean, warms only very slowly, over centuries. Where this difference between the hemispheres is really visible is in sea ice. In the Arctic, sea ice is disappearing at a rapid rate, while it is increasing (slowly) around the Antarctic, especially over the last 5-10 years. How can Antarctic sea ice extent be increasing, in a warming world? The number one reason is geography. The Northern Hemisphere features ocean at the pole and lots of land in the middle latitudes. At the pole, there is only a thin cover of sea ice, a few metres thick. The Southern Hemisphere is almost the exact opposite, a big continent over the pole and almost no land in the middle latitudes. At the pole, vast ice sheets have built up, thousands of metres thick. Following from that, the winds in both hemispheres are quite different in form too. In the Northern Hemisphere, the winds are strong over the oceans but not so much over land, and over the Arctic, the winds are very light on average. So the Arctic Ocean is mostly quiescent, with weak currents and little vertical mixing. Any extra sunlight absorbed when Arctic sea ice melts stays in the upper ocean, warming the surface quickly and promoting more melting. In the Southern Hemisphere, the westerlies are very strong and unimpeded over the southern oceans, the most turbulent region of ocean in the world. Here, water is mixed down several hundred metres, so the heating from absorbed sunlight gets drawn down to depth quickly, leaving the surface temperature mostly unchanged while waters warm at depth. So that “ice albedo feedback” works less well for the sea ice over the southern oceans. The Antarctic sea ice grows out around the edge of a continent, over very turbulent waters, with strong winds and storms above. It seems almost miraculous that it manages to grow to such an extent, so regularly every year. The westerlies, their strength and position, are very important for determining how the sea ice grows. And those westerlies have been strengthening and contracting farther south over the last few decades. The strength of the westerly winds and the turbulent storm tracks that accompany the strongest winds, are controlled by the north-south temperature gradient, the difference in temperature between the tropics and the poles. A bigger difference means stronger winds. How that is changing is a key to understanding what’s going on with Southern Hemisphere winds, and with the sea ice. There are several things that affect the north-south gradient…

The ozone hole (surprisingly!) – removing ozone from the atmosphere over Antarctica cools the polar region (since ozone absorbs sunlight), so increases the north-south gradient.
CO₂ (GHG) increase – away from the earth’s surface, greenhouse warming increases temperatures faster in the tropics than at high latitudes, so also increases the gradient.
El Niño/La Niña (ENSO) – an El Niño event warms the tropics and increases the north-south gradient, while a La Niña does the opposite, for a few months. Crucially though, the ENSO cycle puts kinks in the westerly flow, making it more southwesterly in some places and more northwesterly in others.

Putting it all together, it adds up to the non-uniform pattern of sea ice change we have seen in the last 40 years: increases over the Ross Sea (south of New Zealand) and over the Weddell Sea in the far South Atlantic, where the winds have trended more southerly (colder), and decreases near the Antarctic Peninsula, where the winds have trended northerly (warmer). Other factors in the overall sea ice trend include the melting of ice from the Antarctic ice sheets, putting easily-frozen fresh water into the southern oceans, and changes in ocean surface waves that have affected the break-up and merging of ice floes. Meanwhile, back in the Arctic, we have a fairly quiescent situation with the sea ice melting away at an accelerating rate, as the ocean surface soaks up sunlight. The differences in what’s happening with sea ice at both poles has a lot to do with the detail of geography, winds, the nature of the ocean circulation, and even El Niño and the ozone hole. What we are seeing from year to year are intermediate steps along the way to that generally warmer world, with less ice all round and “polar amplification” at both ends of the earth. We will get there, if we wait long enough. So what’s in store for the future? The last IPCC report demonstrated clearly that the amount of global warming we experience depends a lot on how much more CO₂ we emit. The two extreme scenarios considered by IPCC were the low-carbon future of scenario “RCP2.6” and the high-carbon future of scenario “RCP8.5”. I call these the blue future and the red future, from the colours used in the IPCC report. Under the blue future, emissions are projected to go to zero by around 2060, then become negative after that (CO₂ removal, using technologies we haven’t quite invented yet). That scenario stops the warming before we get to 2°C change, and is the only one considered in the IPCC report to do so. The red future is “business as usual”, just keep burning the coal and oil like we have the last few years. That results in global change beyond anything seen for probably 50 million years. This is the “crocodiles swimming at the North Pole” scenario. So, what about that blue future…? The one all the governments signed up to in Copenhagen a few years ago? There is a clear illustration of the situation in the Ministry for the Environment’s “Discussion Document” issued in May as part of the brief and poorly-publicised public consultation round on what our future national emissions targets should be. That document shows that we have a limited budget of CO₂ we can emit, since the stuff stays in the atmosphere so long and just builds up. To have a good chance (67%) of staying under 2°C of warming, we have a limit of 2900 Gigatons (2.9 trillion tons) of CO₂. The bad news is that we have already used two thirds of the budget, and at current rates it will be all spent within 20 years. So some really significant action is needed if we are serious about reining in climate change. We have all heard of the 2°C limit, the “safety guardrail” that we don’t want to cross. Yet 2°C is nothing magical, no guarantee of safety. Already we have had nearly 1°C of warming and we know already that floods and heat-waves are more likely than they were 50 years ago. Still, keeping under 2°C of warming may stop the big ice sheets from melting too much and would avoid the really extreme changes that are possible. Whatever happens with the total warming, things are bound to play out differently around the globe. For instance, we can look at how long it would take to get to 2°C warming in different places, assuming “middle of the road” emissions. A paper in 2011 by Manoj Joshi and co-authors did just that, and found that much of the Arctic will have passed 2°C of warming within the next 10 years. Going by the huge increase in wild fires in Alaska in recent years, the Arctic may have already over-achieved. Farther south the changes are slower, and over New Zealand and the southern oceans, we’ll have to wait until late in the century. Most of the climate change issues for us will come sooner from what happens to our neighbours and trading partners. There are economic, social, and moral issues associated with climate change impacts in other countries that will put pressure on New Zealand, well before the climate turns nasty here. More importantly than temperature change, rainfall patterns are shifting. It is becoming drier in the subtropics and wetter nearer the poles (and on the Equator). At the latitudes of Australia and northern New Zealand, we are likely to see a lot of drying over coming decades. In the Northern Hemisphere, a very worrying sign is the drying out of the Mediterranean region, from North Africa to the Middle East to southern Europe. This is already a place with lots of issues – political unrest, terrorism, war, economic crises, huge flows of refugees… beyond its direct effects, climate change is an aggravator of all these things. Organisations like the World Economic Forum and the World Bank, even the Pentagon, recognise this and list climate change as an immediate threat to social order worldwide And let’s not forget sea level rise – another big worry, largely because it is so inexorable, and so much of the global population lives close to sea level. Once perturbed, the ocean circulation and the big ice sheets take a long time to respond, so we are in for a long period of sea level rise regardless of the emissions future. Going back to the blue and red futures, the models show sea level rising steadily through this century and beyond under both scenarios. Even on the zero-carbon track, we are set for at least 1m of further sea level rise, over centuries. And as the geological record says, we will see 8, 10, even up to 20m or more if we carry on as we are going now. So, what are the consequences, the impacts? Key ones that concern me are:

Drought – recent droughts and heat waves in North America and Russia have led to partial crop failures and price spikes for corn, wheat and other staples. Future droughts have obvious impacts on food security and water availability for large fractions of the global community.
Flood – as we have seen three times in New Zealand in the past two months. Warmer air holds more water, and the near-one degree of warming so far globally has put about 5% more water vapour in the air compared to the 1950s. So it’s fair to say that some of the rain that fell on Dunedin, Kāpiti and Whanganui was there as a result of the warming we have already had. Further warming just means more moisture and an ever-greater chance of heavy rain.
Coastal inundation – higher sea levels, even small-sounding amounts like 30cm or so, lead to dramatic increases in the chance of inundation events when there are big swells and strong winds.
Health issues – as the globe becomes more “tropical”, tropical pests and diseases can spread farther. Malaria, dengue fever and other diseases are broadening their range right now. The same goes for plant and animal pests. And the health dangers of heat waves are only too apparent, as we have seen in India and Pakistan lately.
Fire – the incidence of wild fires, and the length of the fire season, is increasing almost everywhere. Siberia and Alaska are now experiencing major forest fires regularly, events that were almost unknown 30 or 40 years ago.

This is what we face. In fact, this is what we are starting to experience already. So how do we get on top of it? Can we get on top of it? Yes! There are many technologies and ideas on the shelf that we can use right now. Renewable energy is an obvious one (go China!). For all their coal-fired power stations, China is leading the world on solar panels and wind power installation and technology. New Zealand can ride on the coat-tails of the Chinese and go to 100% renewable energy – despite a high base, we can go a lot further here. And if we wished, New Zealand could be a world leader on renewable technology – are we content with being a “fast follower”? Same story with electric vehicles (go Tesla!). The transport sector a big one in New Zealand and transport emissions have grown rapidly in the last two decades. We love our cars – which is fine, if they aren’t burning fossil carbon. Let’s see moves to bring electric vehicles in to the country in much greater numbers, while at the same boosting public transport and making the most of renewable power sources. That could cut our emissions significantly in just a few years. In the agriculture sector, continued intensification of dairy farming is exactly the wrong direction to be going. It is just not sustainable, especially in dry regions like Canterbury, in terms of water quality, water availability, and greenhouse gas emissions. A much better approach in the short term would be intensified afforestation, which would at least buy us some time to do the research on ruminant emissions. The solutions that already exist can work in New Zealand and can be applied world-wide. We need all of the above, and we need to find new and better approaches every day. As put so eloquently by the Pope just last month, there are moral dimensions, questions of equity, of love for one another, that must take centre stage. Narrow economic considerations must be secondary, as no known economic modelling framework can cope with the true realities of climate change. What is lacking across the board is political will. Governments set the scene for a country’s economic and social activity. All countries, including New Zealand, need to tackle climate change head-on through legislation, through incentivisation of desirable investments and behaviours, through economic instruments that encourage research and innovation in the sectors that we need to boost. The recent ruling by the Dutch courts that their government is harming the population if they do not adopt stringent emissions reductions (25% reduction in 5 years) is exactly right. Governments the world over are indeed putting their citizens more at risk every day by not dealing effectively with climate change. Where is the sense of urgency? Sure there are many worries and concerns in the world, but unmitigated climate change exacerbates almost all our short-term concerns, and ultimately trumps everything. Do we really want to put billions of lives at risk through hunger, thirst, disease, dislocation and conflict, in order to appease the corporate sector and win the next election?

As a global community, we have squandered the last 25 years. The Paris meeting in December (COP21) is a critical opportunity to really get good things happening on a global scale, and on the home front. Greenpeace’s protest at Parliament in June was spot-on – what we really need is climate action, now!

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It’s deja vu all over again: NZ consultation on climate target set up to be a farce

Selwyn Manning — Wed, 27 May 2015 03:33:05 +0000

MIL OSI – Source: Hot Topic – By Gareth Renowden – Analysis published with permission of Hot-Topic.co.nz Headline: It’s deja vu all over again: NZ consultation on climate target set up to be a farce At the end of last week, with the deadline¹ for submissions on a post-2020 target for New Zealand emissions rapidly approaching, the Ministry for the Environment released a second set of economic cost estimates for various emissions targets. These cost estimates are substantially lower, the Ministry admits, than the costs in the consultation document issued by the MfE on May 7th. As it happens, neither the Infometrics modelling used in the consultation document or the newly-published Landcare Research is terribly helpful when considering policy options, as I shall discuss later, but for the time being consider the usefulness of a “consultation” process where the following is true:

Announce a four week consultation period on May 7, starting then, to conclude four weeks later.
Publish a consultation document that plays up the costs of action and plays down the costs of inaction — calculated by Treasury to be up to $52bn.
Conduct a rushed series of consultation meetings around the country to which no ministers front up.
Release the economic modelling relied on for the cost estimates in the consultation document 10 days after the process begins, well after the consultation meetings have started.
Release a second economic modelling report showing costs to be less than the original document presents just over a week before submissions close.

If that’s not a prescription for a Mickey Mouse consultation process that’s designed to pay only lip service to public concern, a disgraceful political sham that should have officials — who are expected to be resolutely non-partisan and to serve the public interest — hanging their heads in shame, then I’m a maker of fine Low Country cheeses. But it gets worse. An examination of the economic modelling commissioned by the MfE shows that the whole process was set up to exaggerate the costs of cutting New Zealand’s emissions. I am not an economist, and I am most certainly not an economic modeller, so I will not comment on the accuracy or predictive skill of economic models, except to note that they are 1.6 million kilometres² removed from climate modelling. I always find it most instructive to look at the assumptions fed into economic models, and to assume that the the results the models generate are reasonable within their own limits. So what are the assumptions baked into the Infometrics modelling MfE relies on for its costs projections? These are what the Infometrics report presents as its “overarching assumptions”:

Given time and budget constraints, the scope of this research does not include any analysis of:

The net impacts of NewZealand’s greenhouse gas emissions on climate change and what the economic and social effects of a changing climate might be.

Non-market policies to reduce emissions, such as restrictions on fossil-fuel generation of electricity and biofuels obligations.

What action consumers or governments in other countries might take against New Zealand if it was perceived that New Zealand was not doing enough to reduce emissions.

Likely trends in global carbon prices.

There are a couple of extensions to that list: the Infometrics modelling excludes any domestic pricing of agricultural emissions over the next 15 years, but assumes that they will be included in international emissions accounting. It also ignores — ignores! — what could be achieved by incentivising forestry planting:

Uncertainty in accounting settings makes it difficult to quantify the effect of forestry and land-use emissions and removals for the purpose of the modelling. To avoid distorting the results, mitigation through forestry and land use has not been quantified or included in modelling estimates presented in this report.

Let’s summarise. This what the economists at Infometrics (and Landcare Research – their assumptions are not too different) were asked to test:

we will ignore the likely costs to society and the economy of a changing climate
we will ignore any non-market tool for achieving emissions reductions by regulation
we will ignore NZ’s international exposure to climate risk
we will ignore anything that agriculture can do to reduce emissions, and assume that the rest of the economy will be happy to subsidise farming
we will ignore anything that our forestry industry can do to plant trees and remove carbon from the atmosphere
and we will assume that we can only meet our emissions obligations by buying overseas emissions units.

In other words: if we assume that we proceed for the next 15 years with a blindfold over our eyes and our arms tied behind our back, we find that action to cut emissions will be expensive. Who’d have thought it? What a surprise… That’s bad enough, but there’s more that the MfE’s economic consultants refuse to price. The consultation document points out that there opportunities to be had in a transition to a low carbon economy, and suggests that electric vehicles are an example of beneficial change that’s already happening. But there are many more to be found in low carbon technology development, both biological and physical. NZ is already recognised as a good platform for testing software and services — and that could be true for more than iPhone apps or accountancy services. What’s worse is that every year we continue down a path that ignores the inevitability of a transition to a net-zero carbon economy, we make action when it finally comes all the more expensive. There is a very real price to be paid for being locked into a high-carbon economy. Tim Groser and John Key are — unwittingly, one hopes — busy turning a drama into a crisis. And it won’t be them that pays the price.

The current government should not be allowed to play silly games with all our futures. They are embarked on an economic and strategic governance failure of epic proportions. I suspect that nothing anyone says in this sham of a consultation will be listened to: but at least what we do say will stand in the public record. Not everyone sank the ship. Not everyone turned a blind eye. Not in my name, Tim Groser.

[Headline, of course, and also Crosby, Stills, Nash & Young, though given where we’re heading Wooden Ships is probably more appropriate.]

Submissions close at 5.00pm on Wednesday 3 June 2015. [↩]
A million miles. [↩]

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Gareth Renowden on Federated Farmers: sticking their heads in the soil?

Selwyn Manning — Wed, 13 May 2015 05:08:04 +0000

Hot-Topic.co.nz Federated Farmers says farmers don’t need to worry about the causes of climate change, they only need to cope with the impacts. Feds President William Rolleston says they have “no position” on whether mankind is influencing global warming, and say that looking at the causes is not that helpful. No position? “We [farmers] need to basically adjust to the realities that are being dealt to us, and why it may or may not be happening isn’t really as important, as actually being prepared for what we actually do get dealt,” their “climate change spokesman” Anders Crofoot told Radio New Zealand today. You can’t have “no position” on the climate science — it’s like telling your bank manager you have “no position” on your finances, despite the numbers being there for all to see. I’m calling it climate denial. I’ll come back to that later, but let’s look at WHY they’re saying that. If you were to take a position, that is, agree that climate change is real and caused by humans, you’d have to act. You’d think. So I guess it’s blindingly obvious why Federated Farmers want to avoid talking about the causes of climate change, because farming, at 48 percent, is the largest contributor to our burgeoning greenhouse gas emissions, and the present government has exempted them from the emissions trading scheme, the one they’re consulting on at the moment. But let’s look at impact of climate change on farmers — what they might be “dealt” as a result of the climate change they’re contributing to but not willing to do anything about, and what they have to look forward to. One climate impact we can look forward to in New Zealand is increased drought. We’re starting to experience droughts here already, like never before. One obvious problem with increased drought is lack of water. And the expansion of industrial dairy farming — often chopping down forests that used to act as carbon sinks — is driving a massive investment into irrigation and increased water use. In February this year, during the worst drought experienced by the South Island farming community, maybe ever, Fed Farmers’ Environment and Water spokesman Ian Mackenzie was on the radio slamming the Government’s Crown Irrigation Fund for providing loans for famers, rather than actual investment for irrigation schemes. The pressure is going on, with both Federated Farmers and Irrigation NZ both pushing hard for Government — and therefore the taxpayer — to front the costs.

What is climate change costing us?

This year’s drought has shaved 0.5% off GDP growth, according to ANZ. Farmers freaked out in February as the unprecedented Canterbury drought forced the shutting of the Opuha Dam for irrigation. Meat prices dropped as farmers, unable to feed their animals, had to cull them. Even Bathurst Resources, which, in the face of plummeting coal prices, is having to rely on supplying coal domestically, reported a drop in income in the first quarter of this year because its main customer, Fonterra, had less milk to dry and therefore used less coal. The 2013 drought in the North Island was the “worst in history” according to scientists and cost the country around $1.3 billion. This drought has now been confirmed by scientists to have been made worse by climate change. The 2007-08 drought had a $2.8 billion economic impact, in on-farm and off-farm costs.

And that’s just the droughts

Let’s turn now to the damages from floods and storms — the type of extreme weather events that are expected to come from climate change. By September 2014, weather-related Insurance had cost $135.4 million. The Insurance Council of NZ predicts that this type of event will cost, on average, $1.6 billion a year, as climate impacts kick in. Of course not all of this cost will be laid only at a farmer’s door, but if you look at the Insurance Council’s list of big disasters the insurance industry has had to pay out for in recent years, it’s clear that farmers have certainly suffered their fair share of impacts.

Back to the science

Given that 97 percent of climate scientists agree that climate change is happening, and that we’re causing it, and we’ve now had no less than five IPCC reports, the question has to be asked: where has Federated Farmers been? Its leader-with-no-position, William Rolleston, is supposedly a smart man. According to this profile, “his appetite for all things science is fuelled by reading on the origins and workings of the universe, biology and natural history.” He sits on the Ministry of Science, Business and Innovation’s Science Board. So you’d think he’d maybe have read the IPCC summaries, or consulted some of his colleagues on that board about the science of climate change, its causes and its projected impacts, and realised that you can’t have “no position” on climate science. If you are a scientist, you don’t get to pick and choose which bits of evidence you believe in. You live with the facts. For a group that purports to be acting on behalf of farmers, one would think that in 2015 Federated Farmers would be taking this issue, and its causes, extremely seriously. The droughts that farmers are feeling today, at 0.8ºC of warming, are already having a serious economic effect on their industry and, given that current projections are that we’re heading to 4ºC of warming, you’d think they’d be going all out to do what they can to stop it. But denying its very existence? Seriously? I just hope that the rest of the country’s farmers, ie the 85 percent who are not represented by Federated Farmers, aren’t quite that stupid.

But if Federated Farmers refuse to take any responsibility for — or do anything about the causes of climate change — and instead continue upping production without paying any attention to emissions, the question has to be asked: why should the taxpayer, and the Government, continue to give them handouts for drought relief or storm relief, or give them a free ride on the costs of their emissions to the rest of the economy? Why should we stump up for massive irrigation schemes to pay for even more irrigation so they can ramp up production further?

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Milk cow blues: dirty dairy costs NZ dear, but methane cuts might work

Selwyn Manning — Thu, 30 Apr 2015 05:30:03 +0000

MIL OSI Analysis – Source: Hot Topic – By Gareth Renowden – Analysis published with permission of Hot-Topic.co.nz Headline: Milk cow blues: dirty dairy costs NZ dear, but methane cuts might work THERE’S GOOD NEWS AND BAD NEWS for New Zealand’s dairy industry this week. On the one hand, research has found a number of compounds that can cut methane emissions from ruminants (cows and sheep) by up to 90% by reducing populations of the bacteria that produce the gas. On the other hand, research into the external costs of dairying — the costs not currently born by dairy companies — suggest that dairying’s value to the NZ economy may amount to a “zero sum” game. At the very least the national income generated by dairy sales is significantly offset by the costs of remediating the environmental impacts caused by that farming — costs that are born by the general tax payer, not agribusiness — according to a team from Massey University. The good news on methane was announced this week at the New Zealand Agricultural Greenhouse Gas Mitigation Conference 2015. Agresearch Principal Scientist Dr Peter Janssen told Radio NZ:

It’s a very exciting result but there’s still a lot of checking to be done before you actually get something that a farmer can use safely.

Interviewed by the NZ Herald, Dr Rick Pridmore, chairman of the NZ Agricultural Greenhouse Gas Research Centre, was upbeat:

The results are significant for two reasons. First, because they work on livestock consuming a grass-based diet and, second because the short-term trials showed such dramatic results,” he said.

However, it might take up to 5 years for these treatments to reach farmers, as the compounds are tested for the possibility of residues in meat and milk. Cutting methane emissions might reduce diary farmers’ liability under an emissions trading scheme that included agriculture — they are at present excluded — but would have no impact on the other external costs calculated in a new paper, New Zealand Dairy Farming: Milking Our Environment for All Its Worth, which suggests that the costs of repairing the environmental damage done by intensive dairying approaches the value generated by the activity. One of the authors, Dr Mike Joy told Stuff:

A strong message from the study is that avoiding pollution is far cheaper for everyone than trying to clean it up afterwards and there is now ample evidence that farmers can make more profit and pollute less when not myopically chasing increased production.

Unsurprisingly, the costs calculated in the paper are vigorously contested by farming organisations and some academics, but will chime with New Zealanders concerned that the rapid expansion of industrial dairying is significantly degrading important rural environments and chipping away at what’s left of NZ’s so-called clean green image. [The Kinks]

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Gareth Renowden on High Water – NZ climate comic anthology

Selwyn Manning — Thu, 16 Apr 2015 04:29:38 +0000

MIL OSI Analysis – Source: Hot Topic – By Gareth Renowden – Analysis published with permission of Hot-Topic.co.nz Scientists investigate how climate changes, politicians (should) decide what to do about it. Tough jobs. Artists have just as difficult a job: to comment on the reality and unreality they see in society’s responses to the climate threat, and by doing so motivate us to create a liveable future. In High Water, a new anthology of climate-inspired work by NZ comic artists, pulled together by Damon Keen and Faction Comics, that response ranges from the touching to the frightening, huge vistas seen through little frames — all presented in visually stunning stories drawn by NZ’s finest artists. The book kicks off with a superb little story by Dylan Horrocks, Dear Hinewai: I’m a great fan of Dylan’s work¹ — his latest, Sam Zabel and the Magic Pen is a real tour de force — and here he draws beautiful and bittersweet postcards from a future where New Zealanders are exploring a radically altered planet by airship². There is a lot of good stuff in High Water, but I have some personal favourites: Damon Keen’s The Lotus Eaters, which takes us on a trip from modern day Auckland through a grim future to the arcadia on the other side of our civilisation reminds me of the comics I grew up with (think Eagle), while Cory Mathis’ My Wife, The Mastodon looks at climate change through the eyes of ice age humans encountering neanderthals (and sabre tooth tigers). Chris Slane’s wonderful Dialogo di Galileo is a powerful poke at climate denial, with a great twist in the last frames. There’s an introduction by Lucy Lawless, in which she hits the nail rather more effectively on the head than our Prime Minister:

These eleven incredible artists have not stinted in imagining the gravest outcomes of man-made climate change. Perhaps a visual warning will work better than a written one, that requires imagination from a recalcitrant mind. Gorgeous work!

She’s right, you know. We need all hands to the pumps if we’re going to deal with the inundation coming our way, and High Water is a most welcome contribution.

To see more images from the anthology, and to get more background on the inspiration behind it, see this interview with editor Damon Keen. High Water, featuring the work of Dylan Horrocks, Sarah Laing, Katie O’Neill, Cory Mathis, Christian Pearce, Ned Wedlock, Toby Morris, Damon Keen, Chris Slane, Ross Murray and Jonathan King is being launched this evening in Auckland. Best wishes to all who sail in her… –]]>

Gareth Renowden on The Age of Sustainable Development

Selwyn Manning — Wed, 01 Apr 2015 06:31:18 +0000

Hot-Topic.co.nz The Age of Sustainable Development IT IS PROFOUNDLY DEPRESSING to hear pundits and politicians talking about the prospects for economic growth with no reference to either equity or environmental constraints. In the case of New Zealand a “rock star” economy can apparently develop accompanied by dismaying levels of child poverty, excited expectations of new oil and gas discoveries which spell disaster for the climate, and a burgeoning dairy industry paying scant attention to the environmental consequences of its rapid growth. Fortunately there are more discerning economists on the world stage for whom economic growth is only welcome when it means an end to poverty and when it fully respects strict environmental limits. Jeffrey Sachs, Director of the Earth Institute at Columbia University, is an outstanding example. His latest book The Age of Sustainable Development is heavily focused on the ending of poverty in parts of the world where it remains endemic and is relentless in its recognition of the severe environmental strains that economic development and soaring population growth are placing on the earth systems on which human life depends. The book was developed as part of a global open online course of the same name offered by the Earth Institute and already taken, Sachs reports, by tens of thousands of students around the world. The book presents a picture of rapid economic growth and population explosion since the industrial revolution got under way in Britain and spread into Europe and America. But it’s an uneven growth and many countries have barely experienced it, not least, Sachs suggests, because of western colonialism which was more interested in the exploitation of the colonies than in their participation in economic development. Addressing this lag in development and the extreme poverty which often attends it is a primary task for development practitioners. Sachs dismisses sweeping simplistic diagnoses (corruption) or prescriptions (cut government spending) or referrals (to the IMF) and instead urges diagnoses that are accurate and effective for the conditions, history, geography, culture, and economic structure of the countries in question. Many countries are caught in poverty traps through no fault of their own and the aim is to assist them out of that and on to the first rungs of the development ladder. Sachs is also alert to the relative poverty within developed countries, including the indigenous societies and other ethnic minority groups neglected in the economic development of the societies in which they are placed. Social justice is integral to the concept of development in his book. Turning to the question of environmental boundaries Sachs asks whether a world that is prosperous and socially inclusive can also be environmentally sustainable. He argues that with careful and science-based attention to growing environmental threats we can harmonise growth and sustainability. That’s not the “balance” that our own government so glibly claims to be achieving between growth and environmental protection. Sachs aims at a full recognition of environmental boundaries. His treatment of climate change is a prime example of the seriousness with which he takes the environmental challenges to development. In a packed chapter he offers a lucid explanation of the basic science and the consequences of the human-induced changes to the climate. In this he provides yet another example of the fact that there is no excuse for scientific ignorance among educated people in this issue of such moment for human life. One does not need to be a scientist to understand the basic thrust of climate science. His conclusion is entirely appropriate:

“The fact is that we should be truly scared, and not just scared, but scared into action—both to mitigate climate change by reducing GHG emissions and to adapt to climate change by raising the preparedness and resilience of our economies and societies.”

Not that it’s an easy task. Sachs describes it as an economic problem beyond comparison with any other, for several reasons the toughest policy problem humanity has ever faced. Climate change is a global crisis, meaning the whole world must be mobilised. It is also an inter-generational crisis and humanity is not good at confronting longer-term challenges. It means forsaking the fossil fuels on which the success of modern economic growth has depended. The crisis is slow-moving, making it difficult to sense urgency. The solutions are operationally complex, covering a wide range of changes. Finally, the energy sector is home to the world’s most powerful companies whose lobbying clout is not directed towards climate solutions. Against this list one wonders that Sachs finds any confidence, but he works his way through the technologies which exist to enable the transition away from fossil fuels, and concludes that the world has climate solutions but that what it lacks is the time for further delay. Climate change is only one of the environmental issues he confronts. He is equally rigorous on species extinction and the loss of biodiversity, on the capacity to grow food for a still rapidly expanding population, on ocean acidification and a range of other threats. It’s a daunting picture. Sachs writes strikingly of the difficulties in addressing it:

“…it is very hard in our noisy, disparate, divided, crowded, congested, distracted, and often overwhelmed world to mobilize any consistency of effort to achieve any of our common purposes.”

In this context he advances the importance of the Sustainable Development Goals (SDG) to be put for adoption to the UN General Assembly this year to cover the period up to 2030, taking the place of the Millennium Development Goals (MDG) adopted in 2000. The MDG were mainly focused on poor countries, but the SDG will have universal application, and Sachs sees them as offering a sense of common direction to individuals, organisations, and governments all over the world. Ideas count. Sachs sees that as his most important message. If it seems a frail defence against the inequality and environmental heedlessness which characterises much of our activity it is nevertheless one he stoutly defends. Ideas can have an effect on public policy far beyond anything that can be imagined by the hard-bitten cynics, he claims. Look at the powerful and embedded economic institution of slavery eventually overcome by the ideas and morality of the anti-slavery campaigners. Consider Ghandi’s lead in helping to end colonialism. Think of the Universal Declaration of Human Rights, of Martin Luther King, of women’s rights.

So there’s something of the moral idealist underneath all the marshalling of economic facts and figures and the unflinching analysis of environmental threats which Sachs’ book contains. A stance I find much preferable to the complacent acceptance of the existing order which is still all too manifest in government and business and which bodes nothing short of disaster before the century is out.

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Gareth Renowden on Totten hots up, ice shelves melting: it’s grim down south

Selwyn Manning — Mon, 30 Mar 2015 06:33:20 +0000

Hot-Topic.co.nz Totten hots up, ice shelves melting: it’s grim down south Much news in recent weeks from Antarctica, and none of it good. An Argentinian base on the tip of the Antarctic Peninsula recently reported a new high temperature record for the continent — 17.5ºC. A team of scientists has discovered that East Antarctica’s Totten Glacier — which drains a catchment that contains enough ice to raise sea levels by 3.5 metres — is vulnerable to melting caused by warm ocean water lapping underneath the ice and reaching inland¹. Another group has stitched together satellite data on ice shelf thickness gathered from 1994 to 2012 and found that the ice shelves — mostly stable at the beginning of the period, are now losing mass fast². From the abstract:

Overall, average ice-shelf volume change accelerated from negligible loss at 25 ± 64 km³ per year for 1994-2003 to rapid loss of 310 ± 74 km³ per year for 2003-2012. West Antarctic losses increased by 70% in the last decade, and earlier volume gain by East Antarctic ice shelves ceased. In the Amundsen and Bellingshausen regions, some ice shelves have lost up to 18% of their thickness in less than two decades.

The Amundsen region is home to the Pine Island Glacier, notorious for its current rapid loss of mass, and probably already past the point of no return for long term total melt. The map below shows the big picture: large red dots are ice shelves losing mass. Blue dots are shelves gaining mass. Ice shelves are important features of the Antarctic cryosphere. They buttress the ice piled up on the land, slowing down the flow of ice into the ocean. As the shelves lose mass, the flow of ice from the centre of the continent can speed up, adding to sea level rise. There’s a very good overview of the process — and the findings of the Paulo et al paper — in this excellent Carbon Brief analysis. The study of the Totten Glacier — one of the fastest thinning glaciers in East Antarctica — is the first to look at the detail of the sea floor and ice thickness in the area. The study finds that there are “tunnels” under the ice leading into a deep trough inland that cold convey warm water inland — the same process that has destabilised the Pine Island Glacier in West Antarctica. As the authors suggest, rather drily, “coastal processes in this area could have global consequences”. These signs of rapid changes around the coasts of Antarctica, together with hints that large parts of the huge East Antarctic ice sheet are at risk of following West Antarctica into the sea, suggest that even if sea levels only rise by a metre by the end of this century as the IPCC projected last year, the longer term picture will be a great deal wetter than that. After all, there is the equivalent of 60 metres of sea level rise locked up in East Antarctica. For a very good overview of the state of our understanding of what’s going on in Antarctica, I recommend a listen to VUW’s Professor Tim Naish being interviewed by Radio New Zealand National’s Kim Hill last Saturday. Naish even covers what’s happening to the sea ice down there, but a longer term study of the sea ice is getting under way, led by another VUW prof — Jim Renwick.

Greenbaum JS et al, (2015), Ocean access to a cavity beneath Totten Glacier in East Antarctica, Nature Geoscience, doi:10.1038/ngeo2388 [↩]
Paolo, F.S. et al, (2015), Volume loss from Antarctic ice shelves is accelerating, Science, doi/10.1126/science.aaa0940

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Gareth Renowden on Climate Shock – How Policy Makers Use Uncertainty to Support Wait-and-See Response

Selwyn Manning — Wed, 18 Mar 2015 23:53:23 +0000

MIL OSI – Source: Hot Topic – By Gareth Renowden – Analysis published with permission of Hot-Topic.co.nz – Headline: Climate Shock UNCERTAINTIES ATTEND THE PREDICTIONS OF CLIMATE SCIENCE, as the scientists themselves are careful to acknowledge. Reluctant policy makers use this uncertainty to support a “wait and see” response to climate change. Prominent American economists Gernot Wagner and Martin Weitzman in their recent book Climate Shock: The Economic Consequences of a Hotter Planet are scathing in their condemnation of such a response. They translate “wait and see” as “give up and fold” and call it wilful blindness. Their own response to the uncertainty surrounding climate predictions is to ask what the worst case scenario looks like.

Here’s what you get: about a 10 percent chance of eventual temperatures exceeding 6 ° C, unless the world acts much more decisively than it has.

This isn’t a figure they’ve made up for themselves. It’s based on IPCC prediction ranges and on the International Energy Agency’s interpretation of current government commitments. It’s clearly a catastrophic scenario, but with a 10 percent chance of happening it must play a prominent part in our thinking and planning. We take out fire insurance on our homes with a much lower than 10 percent chance of their burning down. It’s called prudence, and most of us don’t think twice about the precaution of insurance. The book urges a level of response appropriate to an existential planetary risk of catastrophic proportions. There’s no blueprint in the lively discussion about what might be done and why it is proving so difficult to do it, but a price on carbon is one of the essentials, a point repeated many times over in the course of the book. What price? The authors see an appropriate price is one which prevents us getting anywhere close to 6 degrees warming, and offer $40 per ton as a start, the figure the US government estimates for the social cost of carbon. But it’s only a starting point. What we know of the science points to a higher figure than that. An adequate price on carbon will help channel the human drive and ingenuity which is our best hope of getting out of the threatening situation we are in. The authors quote with approval the words of Richard Branson: “I think a global carbon tax is screaming— blindingly obvious and should have been introduced fifteen years ago…And if that happened, we would get on top of the problem.” There are many obstacles to effective action on climate change. The temptation to free riding is ever present and often succumbed to. It’s at the heart of the global problem of global warming. Incurring costs which result in common benefit doesn’t come easy to most of us. I reflected at this point in my reading of the book that one only has to listen to the evasive words of ministers in the New Zealand government to be aware of how strong the impulse to free riding is. Apparently we are excused from putting a strong brake on emissions because we would lose competitive advantage if we did so; we can continue to explore for more oil and gas because there could be money in it for us; we can overlook agricultural emissions because we are producing food for the world; in the last resort we are too small to make any difference to the overall picture and in any case we’re only doing what everyone else is. So yes, we’d like to see global emissions come down, but we’ll certainly not offer anything that might be construed as a lead. But if free riding allows atmospheric carbon to rise to the point where the consequences are causing major damage the authors point to the dangers of a different phenomenon – what they call free driving. Geoengineering by countries desperate to ameliorate warming is the scenario the authors fear. It would be comparatively cheap and straightforward to inject large quantities of sulphur-based particles into the stratosphere and produce a cooling effect. Their book includes an extensive discussion of this type of geoengineering, not advocating it, but finding it difficult to see it being rejected under extreme circumstances. What the authors do advocate is international discussion and an attempt to establish international consensus in advance which would prevent rogue action. The seriousness with which they consider geoengineering is a measure of the seriousness with which they estimate the future risk of warming. More immediately and positively the authors argue for careful and limited subsidies for low-carbon technologies particularly at the early innovation stages of learning-by-doing. They envisage short term subsidies to enable new technology to get over the initial hump between expensive early production and much cheaper later mass production. They warn of the trap of long-term subsidies, nowhere better illustrated than in the $500 billion global fossil fuel subsidies. The book is hardly optimistic. But the authors reject any accusation of alarmism:

We see it as our obligation to paint the full picture of what we know, and to show how what we don’t know might play out. We take no satisfaction in doing so. We can only hope that we are wrong.

Wrong on three counts: because the most drastic outcomes the science points to don’t come to pass; because society really does do what is necessary to rein in emissions; because the seemingly unstoppable drive to geo-engineering can be put under some governing mechanism.

No doubt readers will share the hope that the authors are wrong. But for the present they do a valuable service in underlining to a strangely heedless society that we really are facing terrible human danger and need to take drastic action if we’re to avert it.

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