Climate Change, Lignite & 'Growth' - Debate on the PM's Statement - Dr Kennedy Graham

I acknowledge Mr Quinn's hardness of heart and meanness of spirit. I acknowledge Simon Bridges' comment that Metiria Turei's speech was a good speech. We know who has a political future. The Prime Minister's statement is simply a reiteration of Government policy enunciated first in the Speech from the Throne 2 years ago and recycled every February and May.


The Government identifies, as its principal goal, building the foundations for a strong economy. That is the platform upon which our aspirations are said to rest. There was no mention of what those aspirations actually are. There was no mention here of a decent society, a far-sighted nation, or a globally responsible citizen—just a strong economy. I say: "Thank you, Prime Minister, for your far-sighted statesmanship!".

What is meant by a strong economy? Building a strong economy is based on "enduring growth". The immediate task is to stabilise the economy and put it back on a growth path. Putting the economy back on a growth path is taking longer than expected, but that is good because the Prime Minister has no clear insight into the relationship between a growth path to a strong economy and a level path to a sustainable economy. Can a sustainable economy be a strong economy? Of course it can but not the way this Prime Minister sees it.

The Prime Minister has no conception of the causal link between his plans for a growth economy today and a failed economy a few decades after his departure. He talks about the emissions trading scheme and wanting to ensure that it is working as well as possible. He believes that the emissions trading scheme prepares New Zealand for a carbon-constrained future by providing business and consumers with the incentives and encouragement they need to reduce their greenhouse gas emissions.

Of course the emissions trading scheme does nothing of the sort. It is accurately described by Geoff Bertram and Simon Terry as a mechanism not for reducing emissions but of transferring wealth, as emissions increase. They say that the scheme has not been designed to promote economically efficient abatement; it has been designed, first, to protect and promote the position of vested interests that are unwilling to shoulder the asset write-downs required to recognise a price on carbon, and, second, to transfer the costs of this to future generations.

Although the original design of the emissions trading scheme, they conclude, aimed to confront polluters with the full cost of a nation's obligations under the Kyoto Protocol, the scheme legislated for in 2008 went only halfway towards this and the 2009 amendments all but abandoned the concept. The original concept, of course, was the carbon tax but that foundered on vested interests. So we all converted to a cap-and-trade system, except that here in God's own we forgot the cap. But we kept the trade, so that we can all succumb to the siren call of auctioning off free credits for next to nothing.

The Kiwi brand of the emissions trading scheme is now a licence to pollute without restraint. It allows industry to pass on today's modest costs within this generation to households and small business, and to allow all of us to pass on the much larger cost to our children. Are we too blind to see what is going on?

The classic example of the insanity of what we are doing is Solid Energy and its Government-backed plans to utilise lignite in Southland—the lowest grade of coal that is possible to mine. Solid Energy's plans include four projects for the extraction of lignite over the next decade. The projects are diesel plants, a urea plant, a briquette plant, and an electricity plant. Each of these is certain to increase our national greenhouse gas emissions.

In 2009 the Government committed New Zealand to a 10 to 20 percent cut in emissions off the 1990 level. This is inadequate in light of the UN prescription of 25 to 40 percent cuts by 2020. But let us at least address the weak target the Government has adopted for itself. At present, with the emissions trading scheme in place, our emissions are projected to be 30 percent above the 1990 level by 2020. That is a national shame, yet that access is calculated without the massive injection into the atmosphere that will come from Solid Energy's cheerful contribution to the betterment of humankind.

The two lignite-to-diesel plants alone will increase that 30 percent emission overshoot by half as much again. That is to say, they will increase the 30 percent overshoot to a 45 percent overshoot. The other projects will make the total worse. How clever is that! What pride are we to take as a nation in that magnificent plan for low-carbon energy at the pure cost of the planet? Having been requested by the UN to cut emissions by some 30 percent by 2020, a country that consciously plans to engage in fossil-fuel extraction, and whose emissions will result in an overshoot of the 1990 level by 45 percent, is a country without shame, a country with no moral integrity, and a country with no sense of global responsibility.

But we should never mind! Who is looking? We can make some money by extracting this atrocious material that will choke the life forms on this planet, and we can export some of it so that it will not appear on our national carbon account. What is more, we hear the claim from Solid Energy—clearly an objective authority on the subject—that the plans for these projects will result in a reduction in greenhouse gas emissions. How do we understand this breathtaking claim? How are we to credit Solid Energy with any credibility on that?

And how are we to reconcile the increasing inconsistency in the various statements being put out by the Hydra-headed creature that this Government has become? The Government has become victim to its own timidity in the face of global climate change, national responsibility targets, and local interest group pressure.

Mr Brownlee is Minister of Energy and Resources; Dr Smith is Minister for Climate Change Issues. We would think that as Ministers in the same Cabinet, serving under the erstwhile Mr Key, they would speak with one voice, or at least have harmonious voices, singing melodically from the same song sheet, but what do we hear? What faint melodic harmony do we discern in New Zealand's official thinking in early 2011?
Dr Smith said the following: "It is ironic that while we try and design pricing instruments to recognise the environmental cost of emissions, the world spends hundreds of billions of dollars a year subsidising fossil fuels and pollution. If we are serious about addressing climate change in the most efficient way, we need to be discussing a phase-out of such support." Mr Brownlee, who prefers energy security to climate responsibility, said the following: "The PCE report on the emissions increase to be caused by the lignite projects is a separate report. It has nothing to do with the Energy Strategy."


Well, I suggest to the Minister that he revises the draft Energy Strategy and make sure that it does. I suggest to the Prime Minister that he devotes his considerable analytical skills to reconciling what his Ministers are saying, because his Government is approaching dysfunctionality in policy. Senior Ministers are saying irreconcilable things. They are saying things that cannot be matched in logic, and after all, this is a logical and rational—if visionless—Government.

So when the Prime Minister said in his speech this afternoon that "This year's election will be about which party has a realistic plan to achieve faster economic growth for New Zealanders.", we agree. Where we disagree is over his blithe assumption that raping the planet for 19th century - style profit is a realistic plan. It is unrealistic to the point of criminal negligence, and this Prime Minister, whether or not he enjoys it, presides over a group of Ministers who are meant to be saying the same thing.

Let me say to the Ministers, and to Solid Energy, that the amount of fossil fuel remaining on the planet is finite. If all the remaining fossil fuel is extracted and burnt, we shall massively exceed the planet's climate-change boundary. Neither energy efficiency nor renewable energy will save us, unless most of the fossil fuel that would otherwise be mined stays in the ground, and stays there forever.
It is implausible that any conventional oil will be left in the ground, but it is possible and necessary to phase out coal, on a straight-line basis, up to 2030. That is an unpalatable truth to anyone thinks that coal is sexy and that dirty coal is the sexiest of all. It remains a truth nonetheless, and this Government had better get over it. We simply cannot afford to be, in the 21st century, "filthy" rich.

I say to the Government and to Solid Energy that every tonne of coal that stays in the ground in New Zealand forever is two tonnes of carbon that will never reach the atmosphere. Both have an obligation to ensure that the lignite never sees the light of today, lest tomorrow's daylight becomes clouded by a hot and stifling atmosphere. It is time we came to our senses.