KEY POINTS:
I'm positive about climate change and energy saving and alternatives. Taking a helicopter view of the problem is a bit like examining the books of a company you are considering buying out. What do we look for? Inefficiencies, ways of making savings, increasing production, selling off some under-performing
assets? The worse-run the enterprise, the better, because you know how you are going to make improvements - lift sales and thereby lift share prices.
The problem in climate change is politics and how to manage the outcomes without making it worse, and negotiating complex agreements that are real, not just aspirational press statements. Many of the present ideas to handle the problem will hurt the poorest people in the poorest places, who say: "You in the West consume up to 10 times more energy per person than us."
Research at Monash University in Melbourne suggests that global cuts in emissions, as proposed by Nicholas Stern, could reduce economic growth in China by 15 per cent, India by 13 per cent, in members of the Association of Southeast Asian Nations by 12 per cent, and in the US by 4 per cent. Many countries that have signed up, and whose leaders made great speeches, have missed their targets, and some who haven't signed up are closer to the proscribed targets than their critics. Yet we must find a way to co-operate, encourage nations to meet targets but allow them to find their own way to meet these targets through a very wide menu of options.
As to the moral case, how moral is it for rich countries to enjoy the inputs for their consumers and businesses from inexpensive-producing countries when this is just exporting their pollution?
In 2012 the Kyoto Agreement, which China and India have not signed, will have to be renegotiated.
I'm sorry, but history proves that only pricing forces up effective alternatives. The only time the major economies dropped energy consumption dramatically was after the oil crisis of the mid-1970s. Commentators last year wrote of a major recession if oil hit $50 a barrel. It's now more than $70 and has exceeded $80 and the world economy has hardly blinked. Within 20 years, energy use will double. That's why natural gas consumption will explode, giving space for the fascinating research on hydrogen to expand. But that will only happen if oil prices stay high. This is a double-edged sword, we won't get progress without corrective, collective price pain.
The United States, which represents just 5 per cent of the world's population but 25 per cent of energy consumption, is twice as energy-intensive as the EU and Japan. Japan is the most energy-efficient, industrialised state. China devours nine times as much energy per unit of GDP than Japan, three times that of the US.
The average American uses the equivalent of 7500 gallons of oil a year compared to the average Chinese who uses 800 gallons. A gain of less than three miles per gallon would liberate the US from Persian Gulf imports. The future is in the hydrogen economy, renewables, clean coal technologies and the next generation safer, more acceptable nuclear option. Most in Australia oppose nuclear energy because they say it's still not safe, but the same percentage think it's OK to export uranium so long as this "dangerous" product is used overseas and is a danger therefore to people who don't live in Australia.
France gets 80 per cent of its electricity from nuclear, Finland and Switzerland 40 per cent. Within 20 years nuclear will be supported by the Greens as some in Europe already do.
New Zealanders have a deep, abiding, cross-party opposition to things nuclear. We will have nuclear energy well after the Vatican changes its views on abortion, and we don't have to face this decision for a generation. Energy pricing is nuts. Profits come from using more, not saving. The minor costs of efficiency are ignored because of the initial cost of a product, despite its longer term savings. This is true of energy- efficient light bulbs, appliances, buildings and cars. Solar and wind alternatives will make useful savings but at present, technologies and prices are prohibitive - it would take 20,000 windmills to power half of London. But investment in renewables has gone from $27 billion worldwide to over $100 billion in four years, a good sign.
Higher oil costs are the hope of alternatives. Only then will the most expensive brains and best companies go to work to find profitable solutions. This is an important debate but it is difficult when, if you ask questions, you are called a denier linking you to the Holocaust, a despicable debating trick.
Full marks to Climate Change Minister David Parker and the Government for putting forward the most comprehensive policy to make our country the first nation to be carbon-neutral. Unfortunately, even if NZ closed down completely that would not offset a weeks' growth of China.
* Mike Moore is a former Prime Minister of New Zealand and director-general of the World Trade Organisation.
