Trading-in the coal scuttle

A little global warming sounds like a good idea at about this time of year. But can that bag of coal really be justified? Tom McKinlay reports.

Otago Polytechnic this week announced a move away from coal for its heating, the decision driven by sustainability concerns and the fact the Otago Regional Council said it had to.

It is a decision recent visitor Dr James Hansen would applaud, as the message from the US climate change campaigner was to leave the black stuff in the ground.

But what about even closer to home? What about the coal in the scuttle at home? Can you get away with throwing a couple of shovels-full on the fire without melting another, albeit small, block from the Antarctic ice sheet?

Well, the good news is that domestic emissions from coal are thought to account for just 0.1% of gross New Zealand emissions, so it could be argued that the polar penguins need not tremble as the coals rattle into the grate.

On the other hand, coal will produce CO2 emissions, at a rate of about two tonnes of carbon to a tonne of coal, wherever it is burned. And for the moment, the domestic coal consumer, as with all other New Zealand consumers, only pays to offset half of those emissions under the Emissions Trading Scheme (ETS).

The Government has subsidised the cost of carbon emissions by 50% until the end of December next year. At that point emissions must be paid for at a cost of $25 per tonne of carbon, the cost of a tradeable New Zealand Unit (NZU) under the ETS.

Solid Energy estimates that a 10kg bag of medium-density coal bought from a supermarket shelf currently carries an ETS component of about 2.5c a kilogram, as part of its price of about $8. After December 2012 that will double to about 5c as the government subsidy lapses.

Small steps in the local effort to rein in climate change?

Very small indeed, according ETS critic Dr Geoff Bertram, a Victoria University Institute of Policy Studies researcher and co-author of the book The Carbon Challenge: New Zealand's Emissions Trading Scheme.

He says the price paid for a bag of coal at the supermarket does not accurately reflect the cost of mitigating environmental effects.

"The emissions trading scheme as it is currently designed is such a shambles that it does not effectively signal a good price on coal."

Which is of course the role of the ETS - it is meant to provide a signal that will encourage people towards cleaner technologies.

Among Dr Bertram's other criticisms of the ETS is that it neither effectively caps gross emissions nor provides a robust market in which NZUs are to be traded. On top of which, it provides little in the way of revenue that the Government could use to help address the costs of tackling climate change.

That someone buying coal from the supermarket does not get to see the carbon charge on their till receipt is another problem with the scheme, he says.

"Along with several hundred things that are wrong with the emissions trading scheme that's one of them - that you can't look at your bill and see how much you are paying to deal with the global climate implications of burning your coal."

The issue will not be settled at the supermarket checkout, however, he says.

"If the world chooses to eliminate human civilisation three generations out, if a deliberate political choice is made that we will live with climate change, enjoy the first half of the 21th century, which is what we are all living in, and flag away future generations, then you are cutting off your nose to spite your face to stop burning coal as an individual household.

"You are living in a world that has decided to go over the edge of the abyss, you might as well enjoy your life while you have it. There's no moral superiority in failing to burn your sack of coal in a world that is going to destroy itself anyway.

"It is called a collective action problem, it boils down to getting a global authority in place to stop the nonsense. To do that, if we are going to be democratic, we have to elect governments around the world that move ahead on that.

"It is ultimately not a game where you can save the world by not burning coal individually, except that you know that if everybody else in the world stopped burning coal too then we would save the world."

There is some slightly more warming news in all of this, from Prof Bob Lloyd, energy expert at the University of Otago.

He says the modern heatpump now just about competes with coal on cost for heating a home.

"I think [coal's] marginally cheaper than a heatpump but there's not too much in it," he says.

Wood is also there or thereabouts in terms of its energy potential.

"The calorific value of coal is about 20 megajoules per kilogram. Wood if it is dry wood is about the same, about 20 megajoules per kilogram."

And while burning wood produces CO2, the tree it came from has also absorbed it in the process of growing.

"The argument is that because wood sucks in carbon dioxide when it is made then wood is CO2 neutral but coal is not so, so it contributes to an accumulation of CO2 in the atmosphere."

So the megajoules required to stay warm this winter need not also warm the planet. What it comes down to is the economic arguments, the part of the equation where the ETS is meant to weigh in on the side of the clean and green, tilting the playing field against coal.

"If the carbon trading scheme works, then that has to be true. If it is still cheaper to operate coal at the home with a carbon trading scheme, then of course the carbon trading scheme has failed. So the only time it can be said to work, is if it makes coal more expensive than the alternatives," Prof Lloyd says.

 

 

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