Vote Energy - Estimates Debate in Committee - Dr Kennedy Graham

The energy estimates in front of us reflect, I believe, a particular mindset on the part of this Government. The highest stated priority of the Government is to build a stronger economy, which will provide jobs, higher incomes, and improved living standards.

The Budget vote identifies two Government priorities, wittily cited as the key Government policy drivers. The first is removing red tape and unnecessary regulation. The intended outcome is "ease of doing business". The second priority is investing significantly in productive infrastructure. The intended outcome is efficient, reliable, and responsive services. So this is the best the Government can do—the highest priorities it can think of in energy.

Here in fantasy land we seek to justify our absurd plan to produce lignite by a postulated reliance on future carbon capture and storage.

One of the flagship projects that the Government is encouraging towards this enlightened outcome is the lignite project in Southland. This erstwhile contributor to the betterment of humankind will emit some 15 million tonnes of carbon each year. That is some 25 percent extra on our total net emissions. Where is the sense in that? Where is the sense of global responsibility that we in New Zealand love to believe comes naturally to us?

The focus of our energy strategy is the extraction of fossil fuels to maximise our financial wealth. Some $166 billion is voted to this. The Government regards the environmental consequences of this manic policy as no more than an irritant, something to be minimised or paid for in clean-up mode as we move purposefully towards financial nirvana.

We can compare this fossil energy strategy with the latest work to come out of Denmark. Over the past year, while we have been planning a massive opencast lignite mine, Denmark has set up a national commission on climate change policy. The Danish commission has undertaken far-reaching modelling and planning. The objective is not to lust for open-cast lignite extraction and offshore deep water drilling, but to identify ways of removing fossil fuels entirely from its national energy system.

The Danish Commission on Climate Change Policy is developing a scenario in which it will have, by 2050, a fossil free energy system, including transport. What is more, this national goal will be achieved without reliance on nuclear energy, and it will be achieved without reliance on carbon capture and storage.

What do we do, in contrast? Here in fantasy land we seek to justify our absurd plan to produce lignite by a postulated reliance on future carbon capture and storage. This technology is not proven. To the extent that it has been tried, it has proven to be dangerous. But never mind, it allows us to rationalise the absurd.

Complete removal of fossil fuels from the energy system, the Danish commission says, would result in an 80 percent cut in greenhouse gas emissions by 2050. Emissions from agriculture would dominate the remaining profile. Clearly, New Zealand would be left with a still significant emissions profile with agriculture, but I tell members to imagine New Zealand having a 50 percent cut in emissions by 2050—a fossil free energy system. Wind and biomass are likely to be the likely contributors to the Danish energy system in 2050. What do we do here? We ignore our local wind manufacturer and we buy Danish.

Whereas the current energy system is controlled only on the supply side, the future system, the Danish commission reports, must also include control on the demand side. This will include smart grids and intelligent energy use. The Government down here in Earth's last islands will respond with the benighted claim that such a goal will ruin our national economy. So let us look at what the Danes have to say.

Their commission has calculated that phasing out fossil fuels would entail an additional cost of some 0.5 percent of GDP in 2050, and it will save the planet. Surely we can do better than we currently are down here. This is not simply a moral concern for posterity; it is a medium term economic security and geopolitical policy transformation.

The Danes have said that although their report is specific to the current Danish situation, the analytical approach they used is generic and can be of use to other nations. Let us send a team of officials to Copenhagen for discussions right now