KEY POINTS:
The Prime Minister is ploughing a field of fertile receptiveness with her theme of "environmental sustainability". In the latest Herald DigiPoll survey, 71.4 per cent of those questioned agreed with the Government's approach. Concern about climate change has brought a dramatic change in sentiment in a short time. So much so that a majority of people would even be prepared to pay a bit more for petrol so their cars would emit less carbon.
They may not need to. The Government says biofuel blends, which oil companies will be forced to sell, will cost no more than ordinary petrol or diesel. Biofuels will be only a tiny proportion - 0.53 per cent - of oil company sales next year, although that is scheduled to rise to 3.4 per cent in five years. But whatever the lack of impact on the wallet at the pump, there will be an array of other costs in other areas, most of which are only starting to be grasped and all of which need to be carefully considered.
The Government calculates that New Zealand can meet most of its biofuel demand domestically from agricultural byproducts such as whey and tallow. But the price of tallow is subject to strong demand from Asia, where it is used, among other things, in soap manufacture. That may mean the only option is to import feedstocks or finished biofuels, which may or may not be sustainably produced. They may have been grown at a considerable expense to tropical rainforests, water resources or affordable food.
Overseas, other drawbacks are becoming apparent as the biofuel juggernaut gathers pace. Most were not predicted and all are unintended. For example, so many American farmers are planting corn, the cheapest feedstock option, that it has doubled in price and is constraining supplies of other crops. Normal agricultural practice has been suspended. And a University of Minnesota study has concluded there may even be a net increase in greenhouse gas emissions if more land is devoted to growing corn.
Soaring demand and rising prices for feedstocks associated with the biofuels buzz must force up the price of food. This has obvious implications for living standards. So, too, does the possibility that biofuels could be symptomatic of a range of ill-conceived responses to climate change. With public sentiment on the side of the environmentalists, the clarion call will be to do ever more, especially if the first initiatives do not deliver the intended benefits. Too often, there could be too little attention to complexity and consequence, and living standards could, increasingly, be imperilled.
Slogans and simplistic thinking are no substitutes for policies that deliver an effective response and do not have untenable economic and environmental consequences. If biofuels begin to resemble a runaway train, the only triumph would be that of easy but, ultimately, errant policy. It is reasonable to ask whether it would not be more sensible to to simply burn crops for power, rather than trying to turn them into fuel for transport? There would be an instant saving of the energy used in the conversion process. True, a car-crazy world would be deprived of an instant feel-good factor. But the response would be more logical and responsible.
The Government, whatever its rhetoric, is so far only dipping its toe into biofuel solutions. That may be the right approach. Closer examination of the policy recommends caution. One lesson can be drawn: products and processes bearing the prefixes "eco" or "bio" cannot be taken at face value.
