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Clean, Green & Clever: NZ Institute’s last prescription

Written By: - Date published: 2:33 pm, May 9th, 2012 - 33 comments
Categories: Deep stuff, thinktank - Tags: , ,

Ever since I went to his Fabian lecture in February, I’ve been meaning to write about Rick Boven’s last major work before leaving the NZ Institute to its Business Roundtable merger.

It’s a major piece of thinking, and a piece he can be proud of signing off with.

He charts an uncertain future – one with major risks, dangers and one we’re all too little prepared for.

We’re certain to face a significantly changed climate, a world scarce in resources, over-populated and with limited leadership.

Energy predictions expect us to use much more than we do today; environmental predictions expect that not to be an option.  We’ve hit overshoot on a global scale.  Nature’s under-valued resources are already being depleted permanently.

So how does New Zealand improve its lifestyle in the midst of all this?

Although he doesn’t use the words, it sounds quite similar to David Shearer’s “Clean, Green and Clever.”  Or the late great Paul Callaghan’s presentation on New Zealand’s economic future:

We’ll actually be a very desirable place to be – relatively low-density population, non-horrendous predictions for climate change effects, already first-world economy.

But we don’t want more tourism jobs – each one of those makes us poorer, as they are worth a lot less than average NZ wealth generated from work.  Farming, fishing, forestry?  Will make us slightly richer, but won’t get us to OECD average – and it’s not like it can be scaled up much either: we’re already talking about the rest of the world being depleted, so we don’t want to replicate Rapanui here again too.

Hi-tech manufacturing is the way to go – those jobs at Google and Apple are the ones that generate teh most revenue per hour worked.

But all this sits in a gloomy world, desperate for food and technology to sustain itself.

Somehow Rick Boven maintains optimism – with the power of individuals to spread ideas and change society and make up for the leadership deficit driven by short election cycles and businesses incentivised for short-term profits.

Can we change from 20th century economics with its belief in infinite resource and waste-sink, and focus on solely growing GDP to an environmental 21st century economics that understands our constraints and focuses on risk?

View the presentation here.

33 comments on “Clean, Green & Clever: NZ Institute’s last prescription”

  1. Draco T Bastard 1

    Can we change from 20th century economics with its belief in infinite resource and waste-sink, and focus on solely growing GDP to an environmental 21st century economics that understands our constraints and focuses on risk?

    Well, we can – if we’re willing to accept the limits which our economists and politicians tell us don’t exist.

  2. BLiP 2

    . . . So how does New Zealand improve its lifestyle in the midst of all this?

    Although he doesn’t use the words, it sounds quite similar to David Shearer’s “Clean, Green and Clever.” what the Green Party has been saying for decades. Or the late great Paul Callaghan’s presentation on New Zealand’s economic future . . .

    FIFY

  3. DH 3

    The problem I see with the green movement is the business model doesn’t seem to be there. Being clean & green is all very nice but it’s not much good if everything becomes so expensive no-one can afford it. On top of that a business exists to make a profit and if greentech costs are so high they can’t compete against dirtytech the businesses will keep on folding.

    It’s a sad fact of business life that you won’t sell many of your (more expensive) goods just because they have a green sticker on them…. the majority of people will keep on buying the cheapest.

    People keep saying “we need to embrace green technology… etc” No-one seems to come up with any ideas on how to actually make a dollar out of it.

    • Shane Gallagher 3.1

      “What you environmentalists have to understand is that the destruction of the planet may be the price we have to pay for a healthy economy.”

      There I fixed your bit of satire for you. :-)

    • Colonial Viper 3.2

      People keep saying “we need to embrace green technology… etc” No-one seems to come up with any ideas on how to actually make a dollar out of it.

      Force polluting industries and designers/sellers of wasteful, inefficient or toxic products to shoulder the full cost of the externalities they create.

      • DH 3.2.1

        Sure, but that was my point. We have no control over other countries, we can only legislate to businesses who are resident here. Impose extra costs on local industry, costs that their competitors don’t have, and you start closing down NZ industry bit by bit. No-one should deny it would result in considerable job losses, you can’t impose extra costs on local manufacturers and expect things to stay the same.

        Green technology has to replace the lost jobs and no-one is offering any ideas on where those jobs are going to come from.

        • Carol 3.2.1.1

          Actually, I don’t think we need more jobs. There’s enough jobs. But we have this absurd situation that some people work extremely long hours, while others don’t have a job. and some people earn way more than they need.

          If standard jobs were more like 3 or 4 days a week, and there wasn’t such an income disparity, there’d be enough jobs and money for all.

        • Colonial Viper 3.2.1.2

          Sure, but that was my point. We have no control over other countries, we can only legislate to businesses who are resident here.

          Tarriff the bad actors when they try and bring product into NZ, and start the process of growing localised NZ industry creating local NZ jobs.

          And screw the WTO.

          • DH 3.2.1.2.1

            I’d thought of that & discarded it because it only applies to imports. We still have to export and who will buy our goods when they’re more expensive than anyone else’s?

            • Draco T Bastard 3.2.1.2.1.1

              Who cares? We’re better off keeping the resources and shifting the workers displaced by declining work into R&D.

              We cannot export our way to wealth.

        • Matt 3.2.1.3

          Those jobs can come from green technology which is heavily subsidized for the short-mid term, and I don’t think that’s a bad thing. China subsidizes the hell out of solar, dumps cheap panels and distorts ‘the market’ (is anyone believes in such things anymore) making it difficult for anyone else to compete unless they are backed up by similar subsidies.  

          The plan is subsidize now, keeping competition – specifically competition that cannot weather the huge long term red ink in an industry that requires huge capital infrastructure (think the under-subsidized Solyndra) out of the market, so when the day comes that no one can deny the need for solar, there will only be one country to buy from.

          There are so many industries they do this with that it’s about time people stop parroting free-market fairy tales and start some gloves off, in-it-for-the-long-haul long term strategic planning.

          Oh and by the way, don’t sell your power companies.

          • DH 3.2.1.3.1

            There’s a small problem with that argument. No-one in NZ makes solar panels and going green will make them even more expensive to manufacture here. Who would establish a plant here, there’s no business opportunity in it.

            • Draco T Bastard 3.2.1.3.1.1

              The government could but it won’t as it only caters to multinational corporations.

              • Matt

                It’s not about solar panels, they are just an example of accepting a short term cost to position yourself well for the long term. 

                And yeah, governments are uniquely positioned to do it but won’t due to dogma and a failure of vision. 

                • DH

                  Ok. Well fossil fuels presently account for about 12,000 gigawatt hours of power generation each year. You’d average about 1000watts per watt annually from a solar panel. That adds up to a requirement of at least 12billion watts of panels to replace fossil fuel generation. Manufactured cost would be around the $1 per watt mark if made in NZ, cost of panels alone $12billion. On top of that you need to invert the DC of the panels & that costs 30-40% of the panel price typically, add another $4billion. And then there’s the cost of setting up the plant, realistic total cost of $20billion.

                  Not undoable but still a lot of money, there’s also the costs of changing the generation profile so hydro & thermal run more at night & less during the day.

                  You say the Govt should pay for it but the Govt doesn’t pay for anything. We pay for it and where is the dosh going to come from?

                  • Colonial Viper

                    You say the Govt should pay for it but the Govt doesn’t pay for anything.

                    False. Government makes up 40% of the NZ economy. It gets its money from taxes on the population, and provides economic and social services which allows the population to participate in the economy to create wealth in the first place.

                    You’d average about 1000watts per watt annually from a solar panel.

                    Nope, your number is low, by a lot.

                    energywise.govt.nz suggests a figure which ranges from 888 kW/h pa to 1750 kW/h pa. (Average 1319 kW/h pa…32% higher than your estimate)

                    And then there’s the cost of setting up the plant, realistic total cost of $20billion.

                    Given that your number is 32% too high, the cost you are looking for is more like $15B.

                    The NZ economy is a $200B p.a. economy. $15B is a lot of money but spread over 10 years at $1.5B pa its nothing.

                    where is the dosh going to come from?

                    We take it from low quality spending, we take it from those who can afford it, and we print the rest. Its not that much which is needed.

                    • DH

                      Actual cost would be double the $20billion, I haven’t covered half of it. Installation would cost a pretty penny, as would changes to the national grid to carry the load differentials.

                      1000watts average would be about right. A panel mounted at 45degress to the sun loses 30% of its generation capacity. To get the max you need solar tracking and for a typical installation that costs more per watt than the panels do… chuck another $5-8billion on the tally for that.

                    • Colonial Viper

                      Why am I going with your estimate instead of the estimate of energywise.govt.nz? They did not mention the use of solar tracking and all those other extras that you seem to add to the list.

                      I haven’t covered half of it. Installation would cost a pretty penny,

                      A cost on the economy on one side is income pm the other side. No problem there.

                      Your numbers are way overblown and you keep trying to push them up for some reason.

                      NZ is a $200B pa economy and $15B is easily do-able over 10 years.

                    • DH

                      I use NIWA stats and real figures from known sites. I don’t know where Energywise get their info from so can’t say what it’s based on but I expect it’s theoretical. But in simple numbers NIWA historical statistics report Auckland as one of the best for solar with a daily average of 4.2 Kw/m2 of solar irradiation. A 1000watt panel directly facing the sun all day should generate 4.2 x 365 = 1533 Kw/hrs or 1533watt/hrs per watt of panel each year. And that’s the most you’ll get, with tracking.

                      A good north facing roof in Auck will typically do about 1200-1300, and that’s in one of the best areas. Christchurch only receives 3.7 Kw/m2 of solar irradiation; 12% less solar energy than Auck. A lot of roofs aren’t sited well and they’ll generate a lot less power, the countrywide average of 1000 is a number I’m comfortable with.

                    • Colonial Viper

                      The bottom line is that PV will remain relatively niche for the moment; wind is where the big game is. $2B of wind can generate

                      DH is also taking the piss by corralling the discussion into massive investment in PV generation.

                      By the way DH, we could get Chinese PV panels for a fraction of the prices you quoted. NZ wouldn’t go into PV panel manufacture because PV panels are a mass produced commodity product.

                  • Draco T Bastard

                    Manufactured cost would be around the $1 per watt mark if made in NZ,

                    Bollocks. Price has dropped considerably and the government building a plant here would get the latest tech and as automated as possible. That means it won’t actually cost any more than building them anywhere else.

                    Not undoable but still a lot of money, there’s also the costs of changing the generation profile so hydro & thermal run more at night & less during the day.

                    It’s called a smart grid and why we need to re-nationalise our power.

                    You say the Govt should pay for it but the Govt doesn’t pay for anything.

                    We are the government and we pay for everything including the rich pricks.

                    We pay for it and where is the dosh going to come from?

                    Same place it always comes from – the printing press.

                    • DH

                      That’s the selling price, not the manufactured cost. They’re still not down to a manufactured cost of 50c US per watt although they expect it reach that within a few more years. Setting up a plant here would have a manufactured cost higher than the Chinese; if it didn’t we’d be doing it already. NZ$1 per watt would be about right for a single plant producing for the NZ domestic market.

                      Arguing over a few cents is splitting hairs anyway. That article you linked to says it currently costs $8000 to install 2.5Kw of panels. That’s $3.20 per watt – translating into a cost of $38.4billion for 12gigawatts.

                    • Draco T Bastard

                      From the second link I provided:

                      When all’s said and done, if you buy Twin Creeks’ equipment, it is promising a cost of around 40 cents per watt, about half the cost of panels currently coming out of China (where the vast majority of solar panels are made).

                      Last time I looked, 40c was less than 50c.

                      NZ$1 per watt would be about right for a single plant producing for the NZ domestic market.

                      See, the thing that you’re doing here is guessing while also trying to make the idea look bad. You come across as the type of person who believes that NZ can’t do anything at all and that we should just leave it to our betters (being either the US and/or China).

                      That’s $3.20 per watt – translating into a cost of $38.4billion for 12gigawatts.

                      Yep, that’s based upon individual installations and keeping everything else the same. Prices will change if the government builds its own manufacturing plant, uses local resources and puts in place a decent installation plan.

                  • Matt

                    Ha. 

                    “it is not about solar panels”

                    “OK. Let me proceed discussing solar panels ad nauseum”

                    [lprent: That isn’t uncommon. I have seen topics diverge into anything. The engineering qualities of burning skyscrapers keeps popping up in the oddest topics for instance. Or the problems of peak oil. Or religions like McCarthyism… But there is always OpenMike and if anyone gets too irritating they may find it safer to only comment there. Bu we do keep an eye on diversions and how far they go. ]

                    • DH

                      Threads often go off on a tangent Matt, it’s the way of open forums.

                      No it’s not about solar panels. It’s about how everything has a price and we don’t always have the money to pay it. If NZ is to go more green we really need a way to turn that to our advantage both socially and economically. Spending more taxpayers money won’t necessarily achieve that, there has to be some concrete gains from the money spent.

                      We’re not a rich country, we’ve been stripped to the bones by a succession of bad governments. When big money gets spent now the numbers have to add up IMO.

                      [lprent: Yep. We let topics drift provided we can’t see deliberate attempts at diversion trolling. If we do then if we’re nice we will move threads to OpenMike. If we are in a hurry or have had a bad day (or even if we just feel like being mean) then we pick a perpetrator or two and donate them some personal attention. If they are lucky we just give them an educational ban. If they are unlucky then they find out why moderators personal attention is immoderate – it is designed to discourage repitition of the offense. I find the uncertainty adds a certain urgent spice to people’s comments that are walking too close to our moderation attention levels. And no – you aren’t on our radars (yet) ]

                    • Draco T Bastard

                      We’re not a rich country,

                      Wrong, we’re a very rich country but we’re using our resources badly (instead of research and development we go for service industries like McDs) and selling them off to foreign ownership.

                      When big money gets spent now the numbers have to add up IMO.

                      The numbers do have to add up but it’s not about money, it’s about resources (NZ can afford all of it’s own resources no matter what because we already own them) and their distribution. Money used as a tool to distribute those resources means the government printing the money and spending it where it needs to be spent to achieve what is desired. Unfortunately, our economists and politicians think that the government is needs to get the money first (borrowed from rich people at interest) and that the whole point of the economy is profiteering rather than ensuring everyone has a good living standard.

        • prism 3.2.1.4

          DH That’s where the Clever bit comes in. Think Pink Floyd’s banner song We don’t need no education, We don’t need no thought control. Actually we need the opposite, particularly getting informed and educated thoughts and the control should be over our preferred prejudices so we can recognise the wider picture and then make clever decisions. Then we won’t sit like nellies blubbing how we can’t do anything about anything, except go with the latest TINA.

    • Draco T Bastard 3.3

      It’s a sad fact of business life that you won’t sell many of your (more expensive) goods just because they have a green sticker on them…. the majority of people will keep on buying the cheapest.

      Then you outlaw the dirty tech.

    • Has anyone TRIED to come up with ways of making green tech profitable? Of course no one is going to come up with solutions if they don’t first TRY.

  4. Colonial Viper 4

    Both the Greens and Labour continue to wildly miss the point.

    Growth can no longer be quantitative, it can only be qualitative. The only real and sustainable “green growth” is native forest. Anything else is going to lead to a mass die off of people, eventually.

    You want 2.5% pa “green growth” for the next 100 years? Newsflash: that means a population and an economy in NZ 12x bigger than the one today. That’s the power of the exponential function.

    Capitalism is going to continue incentivising the most rapid use of resources and highest levels of consumerism possible. Your “resource scarcity be damned”. This is because everyone wants more sales and more profits, which means you have to make and sell more units than ever before.

    Capitalism (and capitalist Governments and capitalist political parties) will never say: can that overseas holiday, keep your smartphone for a year or two longer, trade in your V8 for a 1.6i, choose a smaller flatscreen TV not a larger one, and just work 4 days a week not five. Even though each of those things would significantly reduce our material burn rate.

  5. TimD 5

    DH, please furnish with examples in the current greens policy?

  6. Gareth 6

    As resources deplete won`t peoples ability to use apple,gooogle type products decrease. Wouldn.t it be better as resources become scarce to become a food producer etc? I’d say we should be looking into making ag and hort as sustainable as possible, be a good idea to try a get something to help with up coming phosphate shortages.

  7. prism 7

    I haven’t yet listened to the Fabian lecture or seen the links. But one question occurs – what good will the NZ Institute be if its under the umbrella of big business?

    In my simple mind I had the idea that is was meant to be objective and take the place of the Planning Council. That group that once existed making thoughtful points with informed vision, some government (that on the one hand thought it knew everything already, and on the other disliked the topics raised and the uncomfortable questions they spawned) chose to wipe out.

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