Tuesday, 20 March 2007

Carbon Conservation Parks

The Anvil Hill Carbon Conservation Park

With a new baby granddaughter in the family I have been thinking about buying her a present. I would like to buy her the equivalent of my past lifetime’s worth of carbon dioxide pollution and lock it away so that it never enters the atmosphere. I have been eyeing off the proposed Anvil Hill mega coal mine in the Hunter Valley of NSW as a possible source of the coal that I would put into my carbon safe. I want to prevent Anvil Hill from ever becoming an active coal mine but I want to buy some of its coal, give it to Lilly, and leave it in the ground forever. I think millions of others worldwide would also like to ‘invest’ in the idea of a carbon conservation park.

Lilly will be only 33 in 2040 when carbon dioxide levels, assuming they do not increase any faster than the current rate of 2% per annum, reach 450 parts per million (ppm) in the atmosphere. It is a gloomy thought, but we might already be dangerously close to that mark if the impact of all the greenhouse gases (e.g., methane and nitrous oxide) is taken into account. At this point, many of the world’s top climate science experts agree that a dangerous ‘tipping point’ could occur with the world’s climate spiraling out of control into much higher temperatures, polar meltdown with massive sea level rise and totally unpredictable weather systems. I will have to tell Lilly that largely due to the lack of Australian and USA political leadership, the Kyoto Protocol failed to reduce global greenhouse gas emissions and that in 2007, no major political party in Australia was prepared to immediately reduce greenhouse gas emissions. Indeed, I have to tell her that both major parties, just before a national election, committed to major increases in our emissions for at least another two decades.

Coal miners and coal engineers love their children and grandchildren just as much as environmentalists do. We need to give to our children a sense of hope about the future and demonstrate that we are all prepared to make sacrifices right now in order to take excess greenhouse gases out of our economy and our atmosphere. Of course we must immediately cut our energy consumption and engage in massive energy conservation measures. It is equally obvious that a moratorium on all new coalmines and coal-fired power stations must be implemented while the energy conservation measures and the genuinely clean and safe renewable energy technologies of the post-combustion economy are put into place.

However, we still need to do more. A globally set cap on greenhouse gas emissions to bring the concentration down from its present 380 pmm to safer levels (less than 300 ppm) is urgently needed. From now to 2040 the Greenhouse Gas Index (GGI) will be far more important an indicator of our sustainability than the Dow Jones or the All Ordinaries. Right now, at a personal level, other than direct investment into clean, safe renewable energy technologies, the strongest ethical and practical statement we can make about our commitment to reducing the GGI is to buy pure carbon and permanently take it out of our economy. A clear demonstration that this mature, well-educated and affluent generation is prepared to pay for past greenhouse gas intensive lifestyles and forgo the immediate and future benefits of cheap carbon-based energy and leave it in the ground for the benefit of the common good is what the next generation needs to see right now.

We do not have the time (perhaps 20 years) to wait for speculative carbon capture and storage technologies that only partially reduce emissions even if they succeed. Conventional carbon offset businesses also offer only a limited solution to our current emissions. When we grow a new forest as a carbon offset we buy the equivalent of our carbon pollution as carbon dioxide sequestered in the living and dead matter in trees. However, the problems with forest carbon offset schemes are that the actual amount of carbon sequestered is not easy to calculate and that it can be converted into fugitive carbon dioxide by natural or human-made disaster. If a fire goes through our offset forest, and the forest is not regrown, most of our carbon goes up in smoke. Forests are also long term propositions and we cannot wait another 50 years before a significant amount of carbon is locked up in trees.

Other schemes for C02 offsets seem dodgy. Early dry season burning in Arnhem Land, burning methane from coal mines, non-audited alternative energy schemes in developing countries and low energy light bulbs that never get turned on give the whole idea a bad reputation. A radical new approach to carbon accounting is needed.

Let’s examine the proposed Anvil Hill coal mine in the Hunter Valley as a case study in carbon accounting. Over its projected life of about 20 years it produces 10.5 million tonnes of coal per annum. If the coal is sold on the open market, at $50 (Aus) a tonne, the current historically high price, this coal is worth about $525 million per annum for the shareholders of Centennial Coal, minus about 7% for royalties paid to the government (calculated after costs such as washing and transport to port have been deducted). The final value would be less than $500 million per annum. If, theoretically, the carbon dioxide produced by Anvil Hill is captured and sequestered, at the current cost of about $100 per tonne of coal, it would deliver to Centennial a $500 million loss per annum. I can feel a huge public subsidy for carbon capture and storage coming on.

Moreover, if we convert 10.5 million tonnes of dirty coal via combustion to the 27 million tonnes of carbon dioxide equivalent (its 100 year global warming impact), then according to the Stern Report, it generates $109 per tonne in costs in damage to the earth and our economies or over $1.0 billion per annum. Again, Anvil Hill makes a $500 million loss per annum. The economics of business-as- usual and carbon capture and storage just do not add up. It is obvious that options other than burning coal are urgently needed.

With a shift in imagination we can think about Anvil Hill’s annual 27 million tonnes of C02 equivalent as a guaranteed and instant pure carbon offset, one that can never be subject to accidental carbon dioxide release. With the current price for carbon offsets in NSW at $20 a tonne, then by selling the pure coal as a carbon offset, the value of the coal would be about $500 million per annum. To offset the 27 tonnes of C02 equivalent per annum generated on average by each person in Australia, it would cost me a mere $500.

After consulting with my carbon accountant, I give baby Lilly on her first birthday a certificate showing her that I have purchased the equivalent of my past 10 year’s generation of greenhouse gas emissions. As my financial situation allows, I will be able to offset the total of my past 54 years of treating the earth as a ‘free’ waste bin for my greenhouse gas emissions.

As others worldwide make similar bequests of pure carbon, never to be used in the future, for their children and grandchildren, we speed up the decarbonisation of our economy. However, I still have to pay more in the here and now for carbon-based fuels in the form of other carbon taxes that are designed bring the GGI down to below 300ppm. No purchase of ‘indulgences’ here where I continue a carbon profligate lifestyle without taking carbon out of the economy. I pay twice for my carbon, once for my past consumption and again as I consume carbon in the last days of the combustion economy. Ultimately, as the economy becomes carbon neutral, my carbon tax noose is loosened. I have offset my lifetime’s emissions and I pay no more carbon taxes in a post-carbon and post combustion world.

The Anvil Hill Carbon Conservation Park option looks like good value as it includes the complete preservation of landscape values, ecosystem services (water supply, arable soil, biodiversity) and no additional cumulative impacts on farmers and residents of the Upper Hunter. The shareholders of Centennial have a return on their investment and the State of NSW gets offset royalties from permanently sequestered carbon. I see no reason why coal from any other working coal mine cannot be bought by those who wish never to mine or burn it; after all, it is a free market.

Moreover, it would be optimally ethical for the State government to invest all of its new carbon offset royalties into clean, renewable and safe energy technologies with all new employment going to ex-coal industry workers. A final bonus is that we will not have to develop hugely expensive ‘cleaner’ coal technology as we save a lot of money by leaving coal in the ground. All this money then goes into developing clean, safe renewable energy. This is a win, win, win situation and the Anvil Hill Carbon Conservation Park will become world famous as a turning point that helped prevent the tipping point into global climate chaos.

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