Lignite and Climate Change report findings endorsed

Senior academics at Victoria University of Wellington today endorsed the findings and recommendations of the report by Parliamentary Commissioner for the Environment Lignite and climate change: The high cost of low grade coal.

“Dr Jan Wright has produced a rigorous and compelling analysis of why mining lignite and converting it to diesel, urea or briquettes is contrary to New Zealand’s economic interests,” says Professor Jonathan Boston, the Director of the Institute of Policy Studies at Victoria University.

The report argues that any large-scale mining of lignite (or brown coal) in New Zealand would be inconsistent with the country’s pledges at the Copenhagen conference in late 2009 on climate change. The mining would significantly increase New Zealand’s greenhouse gas emissions, thus exposing the Government, and hence taxpayers, to huge financial risks. Equally, it would be inconsistent with New Zealand’s ‘clean, green’ brand – thereby placing the country’s valuable tourist and export industries at risk.

Dr Geoff Bertram, Senior Associate of the Institute of Policy Studies and a leading energy economist, agrees with the Parliamentary Commissioner that free allocation of carbon credits for new lignite-processing industries under the Emissions Trading Scheme (ETS) would amount to taxpayer subsidies worth billions of dollars for activities that would damage the nation’s international ‘clean, green’ brand.

He was strongly supportive of the report’s recommendation that all new industries using lignite on a large scale be specifically excluded from receiving free carbon credits under the ETS. He agreed also with the report’s view that the prospective benefits claimed by promoters of new lignite ventures – lower energy prices, supply security, and employment – were being overstated, and could all be secured more effectively by less environmentally destructive activities.

As the report notes, the greenhouse gas emissions from the large-scale mining and use of lignite in New Zealand could be mitigated via carbon capture and storage (CCS) and/or storing carbon in new forests. But the academics support Dr Wright’s conclusion that “it would be irresponsible to make decisions now that rely on CCS” because the technology is only in its early stages of development internationally. Moreover, New Zealand currently lacks the necessary legal and regulatory framework for using CCS, and such technology is likely to be costly and entail substantial risks.

Offsetting the greenhouse gases produced from using South Island lignite by planting trees is an option, but one which has flaws according to Associate Professor Ralph Chapman, Director of Victoria’s Environmental Studies Programme.

“Huge new plantation forests would be required to offset the volume of greenhouse gases expected from the industrial developments foreshadowed by Solid Energy and L&M Group.

“Moreover, a new swathe of land would have to be planted in forests each year to offset the expected emissions, as long as they continue. There are obviously physical limits to the amount of land available, as well as large opportunity costs associated with such a scenario.”

ENDS

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