Right answer, wrong question

Written By: - Date published: 11:32 am, April 30th, 2008 - 3 comments
Categories: climate change, economy, Environment, national - Tags: , , , , , ,

It’s not often National gets something right but their latest flip-flop, on bio-fuels, is a good policy (well, partially and for the wrong reasons). National has announced they will no longer be supporting the bio-fuel requirement in petrol because it may put up the price of petrol a few cents.

The bio-fuel requirement was always an environmentally dubious idea with limited potential to reduce our greenhouse emissions. It is looking increasingly dubious now that it seems we will have to look offshore for some of the bio-fuel, which may mean conversion of native forests or food crops into bio-fuel crops. Unless bio-fuels can be harvested sustainably from plants that do not displace food crops, there is little point in them. That will not be possible until the technology improves so that trees can be used as a crop, and that is some years off. So, bio-fuels are OK but the incoming bio-fuel requirement is not so hot because of where the bio-fuel must come from.

But petrol prices is not a good reason to oppose the bio-fuel requirement. The price of petrol is determined by international prices, they have doubled in a year and our petrol has gone up significantly less than that. People point out quite rightly that some of the price of petrol at the pump is government tax (GST, excise, and the new regional taxes) but every cent of the money collected by those taxes (and then some) goes into transport infrastructure. Cut the taxes, cut the money available for roading and suffer the consequences as the system degrades; if we start cutting taxes because the price is too high, we are burning the future to stay warm now. And prices will just rise again as the international price of oil keeps climbing. Cutting tax is not the solution to international peak oil.

It’s a pity that, at the same time, National also announced they oppose the regional fuel taxes, which will fund increased public transport to give people a cheaper option instead of driving in their cars on expensive petrol.

Still, one decent policy out of two, if for the wrong reasons. It’s a start.

3 comments on “Right answer, wrong question”

  1. Ari 1

    Opposing the biofuels mandate is NOT a good policy. In fact, it’s throwing out the baby with the bathwater.

    Opposing our mandated target being met by unsustainable and unethical biofuels such as those made with corn/maize IS a good policy. There are viable biofuels out there to be used, and in sufficient quantities for the mandated amounts. The question is whether we can get them as quickly as Labour wants- which I think is entirely possible if we don’t put the matter on the back burner.

  2. Steve Pierson 2

    Well, it seems from what I’ve seen that we won’t have enough biofuel from sustainable and ethical sources in time. that’s the root of my opposition to it. of course that not why the nats oppose it, they’ve got some silly idea that it will stop the price of petrol rising – hence the title.

    And it must be remembered that the environmental case for biofuels isn’t all that strong to begin with, it’s only about moving from consuming long cycle carbon to shallow cycle carbon, but it may mean stopping some of the natural long cycle sequestration.

    I’m not dead set agaisnt bio-fuels, far from it, but they are at best a half measure towards clean energy and right now getting to the target amount the government has set would ential negative consequences.

  3. insider 3


    You are incorrect. The NZ mandate level was based on the expectation that ethanol from NZ corn crops would be available. In fact the mandate level was increased specifically so it couldn’t be reached without that ethanol; previously it was at a level that could be done using NZ tallow alone (although it was based on a dodgy assumption in my view).

    It’s in the 2007 Cabinet paper.

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