Green growth

By Eric Crampton 14/11/2012 3

There’s a new ‘Green Growth’ report out. The Science Media Centre asked me for comment; here’s what I gave them, along with a few additional comments below.

“There’s much to like in the [Green growth] report. It rightly recommends that New Zealand move toward more efficient pricing and trading of water resources. Similarly, they recognize the opportunity for New Zealand to make a global difference by directing research and development resources towards lower-emission pastoral systems – so much the more so if New Zealand were to release the developed technologies under Creative Commons license as our contribution towards reducing global warming. Streamlining regulations to let entrepreneurs take advantage of New Zealand’s natural potential comparative advantages in aquaculture also is well worthwhile.
“I worry that some of the identified opportunities may impose cost well in excess of potential benefit.
“While more energy-efficient buildings would be very nice to have, regulatory mandates in the area often have perverse effects. For example, mandates that homes undergoing renovations also be brought up to higher energy efficiency standards can encourage people to avoid renovating their homes. Financing programmes assisting those already undertaking renovations for earthquake-strengthening to improve energy efficiency at the same time would be more effective; by contrast, EQC in Canterbury has been barring homeowners from undertaking any energy-efficiency improvements while repairing earthquake damage.
“Imposing carbon dioxide emission standards on New Zealand vehicles, when we do not make vehicles, mostly shifts to other countries those used cars we would have bought. We already have seen evidence of reduced used car availability and higher prices consequent to the government’s recent regulatory measures that effectively barred Japanese imports produced prior to 2005. Further, shifting towards greater use of electric cars because of New Zealand’s low electricity emissions-intensity would only work if we were able substantially to expand our base of hydroelectric or geothermal generation.
“I was somewhat surprised to see no recommendations around allowing well-regulated hydraulic fracturing technology for natural gas extraction. Wave and tidal power are worth investigating, but remain rather too uncertain to bank on. Greater use of natural gas powered thermal electricity generation is likely New Zealand’s best bet for lower emissions intensity power generation in the absence of substantial breakthroughs in other energy sources.”

I’ll add a bit here.

As best I understand things, coal is now part of our baseload generation capacity. Huntly runs all the time, their gas turbines are easier to fire up and scale down for peaking than are their coal units, and our hydroelectric stations are obviously better as peaking units. Adding electric cars adds to baseload demand, so we need more baseload capacity. That’s ideally hydro, which is banned by the environmentalists / water spirits people. Wind can be part of our baseload because it can be partnered with hydro: when the wind blows, we can dial back the hydro plants and save the water there for times when the wind is calmer. But, that means they need to service the same demand points as our hydroelectric stations. And hydroelectric plus lots of wind means the Canterbury High Country. And the environmentalists / scenery people have banned our putting wind power there too because it would make a tiny percentage of that scenery look different. So that’s out too.

Fracking can be done safely – from my read of the literature, whatever problems there have been in some cases with water contamination can be avoided by techniques that only slightly increase the cost of extraction. Getting more access to cheap natural gas in New Zealand can displace what coalfire generation we are running and gives us room to expand generation capacity at lowest environmental cost given the existing political constraints. But the Greens have pushed to ban that too, and have succeeded in getting a pile of Councils to ban it within their catchments.

What’s left? Maybe more geothermal.  Tidal remains a bit of a pipe dream – I hope we can get there someday, but I’d sure want it on-stream and running before pushing everybody into electric cars. Solar faces some of the same constraints as wind – it’s a great complement to hydroelectric and lets us store electricity in the form of lakes-not-yet-run-through-turbines when the sun shines. And maybe it’ll be low enough cost sometime soon that we’ll be able to use it. And I wonder whether the same “Oh but I hate everything that changes anything” people will work to ban solar plants near our hydroelectric stations in the same way that they’re putting wind into the “too hard” basket.

Pushing more demand onto the grid, without getting more capacity on the grid, is a bit scary. I like the stuff in the report about getting more active demand management systems. That will help smooth out some of our peaking issues. But we need more baseload if we want electric cars sometime down the track. It’s not obvious how we get there from here.

Bill Kaye-Blake also provides useful comment:

Bottom line: the report seems to be a re-tread of well-known issues with a recommendation to spend more public money to help private businesses. When it comes to really difficult issues — what trade-offs are we willing to make? how do consumers symbolise environmental values through economic transactions? — it seem to fall silent. Maybe somewhere in those 300 pages they grapple with the hard stuff. If so, Pure Advantage will have gotten its money’s worth.

3 Responses to “Green growth”

  • You appear to have a sadly stereotyped view of “environmentalists/scenery people”. You are also very much misrepresenting people who opposed the Project Hayes proposal and Mohikinui River dam proposal and their reasons for opposition.
    Finally you are revealing your own biases with your false syllogism that because some “environmentalists/scenery people” opposed one hydro proposal and one windfarm proposal, therefore this all-powerful Illuminati-like group has banned all hydro and all wind energy development.

  • I’ll clarify further: there is no all-powerful conspiracy. There doesn’t need to be. The regulatory system creates veto players and subsidises others to become veto players. It doesn’t take a lot of opposition to kill a project, and that opposition hardly needs to be coordinated across projects.

    From the perspective of those developing projects, how likely would they find it that SOMEBODY would oppose another project like Canterbury high country wind farms or another Project Hayes? Pretty likely? What does that do to the incentive to spend tens of millions scoping out a new project?

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