Peter Read: Recognise the folly of our ways

That the Kyoto process is in trouble is no surprise, given its strongly cost-enhancing features impacting mainly on the well-organised energy industries. The underlying economic doctrine that points to putting a price on emissions, choking off demand - effectively demand for energy in the short term - is misapplied.

Kyoto panders to the logical fallacy that the best way to cure a problem is to reverse it - rather like trying to ski up the piste instead of using the lift.

Not that I am critical of New Zealand ratifying the Protocol - otherwise we would align with the nay-sayers, postponing action on this possibly urgent issue till possibly too late.

But as a practical approach to getting greenhouse gas levels down, it's like the charge of the Light Brigade "magnificent, but not how to win a war".

Energy emissions are one-20th of the natural fluxes of greenhouse gases to and from the terrestrial biosphere, a different situation from that addressed by the doctrine.

Not only is the Kyoto approach cost-enhancing, it also misses out on the immense benefits that can come from a holistic approach that manages the overall flow of greenhouse gases into and out of the atmosphere.

That approach involves investing in the land, shifting the balance of the natural fluxes through profit-enhancing change in food and fibre production and use in the agricultural and forestry sectors.

When this strategy was advanced in 1994, Nobel Laureate Thomas Schelling commented it was "a skilled attempt at fashioning policy and a deep foundation for thinking on the subject".

Sadly, few have been doing that thinking, and Pete Hodgson declined even to discuss the concept.

Its timing was bad. Nobody wanted to know, since it is a fundamental critique of the in-fashion doctrine that led to the Kyoto Protocol.

With a training in economics and law, David Parker is better equipped to ask hard questions of his advisers. Perhaps he will see through the posturing and cross-accusations of bad faith or woolly minded idealism, from right and left.

Of course, the science is uncertain: how can anyone maintain otherwise when the models show a discrepancy in the likely temperature increase this century, from a possibly benign 1.5 to a certainly catastrophic 5.6 degrees Celsius.

But uncertainty is no reason for inaction: in my childhood we built bomb shelters despite uncertainty whether Hitler would bomb our street (he did, but missed us).

Why possibly urgent; why possibly too late? The models fail to replicate the pervasive climate instability before the past 10,000 years of fortuitous benign stability that has enabled intelligent hunter-gatherers to become settled agriculturalists, supporting cities and the evolution of civilisations.

Melting tundra with methane escapes; shrinking Arctic sea-ice with increased ocean warming; accelerating glaciers on Greenland and Antarctica are all potential symptoms of impending instability, maybe catastrophic but certainly instability that is not well modelled.

If faced with imminent instability, the holistic strategy says link bio-energy with CO2 capture and sequestration, to give a negative emissions energy system that may get greenhouse gases down fast enough to save the day, or rather the century.

But investing in the land offers the prospect of low cost, and multiplying the beneficial achievement of the Kyoto targets.

Key to this approach is the co-production of bio-energy with food and timber, making use of currently wasted materials, and increasing their volume with effective incentives.

Benefits include helping many developing countries to help themselves through South-to-North trade in liquid bio-fuels, and alternative farm support, WTO acceptable, in Europe and North America (with linked trade liberalisation benefiting New Zealand farmers).

Energy security is needed - with oil prices at current levels, such investments pay for themselves. In Brazil, motorists with dual fuel cars which adjust to whatever mix of petrol and alcohol that is in the tank, are happily choosing to run them on pure alcohol.

A smart policy would mandate importing an increasing proportion of such dual-fuel vehicles.

That is an example of a technology-oriented policy the Greenhouse Policy Coalition is advocating. In principle, nothing is wrong with such policies - capping emissions at 90 per cent of demand is no different from mandating 10 per cent renewable supply, give or take demand elasticity.

What is open to criticism with the way such policies have been advanced overseas is that they are voluntary, not mandated.

Such a policy is not, as argued by some greenies, reneging on Kyoto. The Kyoto target can be achieved much more easily by technology-oriented investment, including in land as well as in wind-power and the like, than by taxing fossil fuels.

A system of allocating permits usefully would promote desirable innovation and ensure the integrity of the emissions cap.

For the moment, Kyoto rules restrict investments in land to forestry-related schemes, meaning woody wastes for heating fuel until emerging technologies for converting woody material to alcohol are commercial. David Parker should negotiate to abolish such restrictions.

Meantime a rapid expansion of wood-pellet home heating, and mandating a rising proportion of wood fuel firing at Huntly (and Marsden B, if it goes ahead) could go far to meeting the Kyoto commitment, with minimal impacts on energy prices and on New Zealand's competitiveness in overseas markets.

But all this needs the new Government to recognise the follies of current policies, abandoning the provocative carbon tax and getting New Zealand firms better integrated into the emerging global carbon market, to become buyers as well as sellers.

Above all it must recognise the folly of stealing the Kyoto forest credits from the landowners who created them. To defend the indefensible by claiming that shouldering the risks is fair compensation is like saying the Earthquake Commission should take our homes.

* Peter Read researches climate change issues at Massey University Economics Department