Ideology destroys energy efficiency

The former Greens co-leader questions why, given its "retrograde vision" for energy efficiency, the National Government wanted to collaborate with the Greens in the first place

If we have a price on carbon, do we need any other measures to reduce greenhouse emissions and ensure energy is used efficiently?

This is often characterised as a left–right debate, with the left wanting regulation and the right preferring markets. But it’s not that simple. All markets in a civilised society work within regulatory constraints—look at the amount of legislation necessary to set up an emissions trading scheme! And regulatory measures are often designed to influence the operation of a market, such as a biofuel obligation or a grant for insulation.

That’s why the Greens take a pragmatic approach—let’s do what works, at least cost.

On the market side, we proposed a price on carbon in 1994, long before any other party would countenance it. We still think that’s needed, although the National Government’s version of the ETS is a weak and expensive way to go about it.

A price is necessary; but in the energy area not sufficient, because of many well-known market failures.

That’s why I introduced the Energy Efficiency and Conservation Bill in 1998, later passed in 2000, which gave the power to set Minimum Energy Performance Standards (MEPS) for products, as most of the world had been doing for some time. Territories which have succeeded in substantially reducing the energy they use to produce goods and services, like the stand-out example of California, ascribe most of their success to a system of codes and standards for buildings, products and vehicles.

Imagine how high the price of electricity would have to be to get a consumer to investigate the energy consumption of plasma TVs and choose accordingly. It’s just not on your mind when you are shopping for entertainment toys, even if you do understand what the stars on the label mean. Much simpler to set a standard for energy efficiency that must be met by all appliances offered for sale, then encourage the choice of the best ones over and above that.

Over the last eight years these standards have been set for a wide range of household appliances and some industrial ones. The junky products that were going to cost the earth to run just don’t come into the country any more. Without really being aware of it, consumers have saved0201 $143m to date, equal to a small power station, projected to be $147m a year by 2012.

I have trouble understanding the antipathy of the National Government to standards of this kind. Products have not become more expensive. There is still a huge amount of choice. It seems to be ideological.

After pausing for much of the year the MEPS programme for products is underway again but unlike most developed countries we still have no standards for motor vehicles. If electricity is important, how much more important is oil—100% imported; a depleting resource that can only rise in price; and highly carbon intensive. Transport produces 43% of our carbon dioxide emissions; more efficient cars could make a big dent in this.

The average fuel consumption of the NZ fleet of light vehicles is 10.5L/100 km. In the EU it is about 7L. Fuel economy of vehicles entering this country has improved slightly over the last five years, but we will get further and further behind the EU at this rate as they keep setting higher and higher standards. Even China has been improving faster than us and is already way ahead.

When a new vehicle is imported it stays in the fleet for up to 20 years. Most new imports are ordered by firms, for whom they and their fuel is tax deductible. Many are ordered for senior executives as part of their salary package, and the larger the vehicle the greater the status conveyed. It will be replaced after something like three years, then continue to cost its later owners far more than they need to pay to get around.

The person who buys this car 10 years later will need one that uses fuel efficiently, especially as approaching peak oil pushes prices to new highs. But the only vehicles to choose from will be those imported earlier by people who didn’t much care about the cost of running them.

The Greens calculated in Getting There, our plan for how to achieve a climate change target of 40% below 1990 levels, that if we set a standard for the average fuel economy for light vehicles  by 2013 that all importers must reach, then raised it every two years, we could nearly, but not quite, catch up with where the EU will be by 2020. That would better than halve the emissions, and the fuel use, of vehicles coming over the border by that time. Clearly there is a big choice of vehicles that meet those standards, as other countries are already required to use them. I counted 129 models currently on the market in NZ that already meet our proposed 2013 standard. Of course, some of the most efficient cars don’t even get here, as the market for efficient cars is too small. We could change that.

It seems to be painless in the EU, Japan, China and other countries that do it. But the National Government has ruled it out, consigning New Zealand to be the dumping ground for inefficient vehicles for decades to come.

You don’t have to be a genius to see that the new Energy Efficiency and Conservation Strategy will be a huge step backwards. The existing one has action plans for each sector—households, industry, transport, etc. It sets out clearly who is responsible for carrying out each action, and by when. It makes it clear whether that policy is funded or depends on future budgets. It has real numbers in it—PJ of energy saved by certain dates, and carbon emissions reduced. It includes MEPS and standards for vehicles which have been under development. It was developed after two rounds of public consultation and took around three years to write because a lot of background work was needed to ensure the numbers were as accurate as they could be.

In October MED published on their website the annual performance review of the NZEECS. (No, the Government didn’t alert me to it—we found it online.) The appendix has a useful colour coding which reveals that a lot has been achieved in the two years of the Strategy, but that a number of proposed actions have already been cancelled by this government. Along with vehicle fuel economy standards these include: energy standards for commercial buildings; the “Sustainable Households Programme” giving energy advice to home owners; the Govt3 programme helping departments cut their use of energy, paper and vehicle emissions and reporting the results; and the on-site worker training programme in energy efficiency which I worked with the CTU to establish.

Future actions which will not proceed include expansions to the programmes for energy efficiency in industry; a number of programmes around small scale distributed electricity generation; options to improve the energy efficiency of the rail system, including looking at further electrification; and a Marine Energy Atlas identifying sites for tidal and wave power.

Watch for a slim document to emerge shortly, with a lot of fluff and no numbers. There will be lots of “encourage” words but no standards because too many people have been brainwashed into calling them “nanny state”.

Watch also for the future repeal of the inconvenient Energy Efficiency and Conservation Act, as hinted in the 12 May MED paper to Gerry Brownlee, which I have just obtained courtesy of Pundit.

With such a retrograde vision of energy efficiency for New Zealand, it is little wonder the National Government didn’t want to collaborate further with the Greens. I can only wonder why they sought to do so in the first place.