A few quick reflections on the Productivity Commission's draft report on a low emission economy. (Note 1)
First up, why does the report say ‘economy’, not ‘society’ or ‘country’? Sounds like we just need to make a few economic adjustments (for example, better price carbon), otherwise we can carry on as normal. Perhaps that reflects the basis of the report - apparently the Government asked the Commission to identify options for how New Zealand can reduce its domestic greenhouse gas emissions through a transition to a low-emissions economy, while at the same time continuing to grow income and wellbeing.
But of course the report does not say that only a few adjustments are needed. Rather, there are big changes needed that will affect incomes, wellbeing and communities. Feels a bit like a mountain to climb. Four big actions are noted:- getting emissions pricing right, to send the right signals for investment;
- harnessing the full potential of innovation and supporting investment in low-emissions activities and technologies;
- creating laws and institutions that endure over time and act as a commitment device for future governments; and
- ensuring other supportive regulations and policies are in place (including to encourage an inclusive transition).
Changes to urban form to encourage lower emissions are given short shift by the Commission. Not surprising given previous reports from the Commission on miss-behaving planners and urban designers. The low emissions report says: “Overall, evidence reveals modest emissions reductions associated with a transition to more compact urban forms, provided that this occurs in tandem with changes such as improvements in accessibility and public transport. However, rigidly enforced, urban planning policies that seek to contain growth can be detrimental to housing affordability and run counter to the housing and location preferences of most New Zealanders. In addition, achieving increases in the type of density that reduces vehicle travel is not straightforward. The process is gradual, so any material benefits are likely to take decades to eventuate”.
There is also the normal rider that cities are all too complex to manage other than by way of efficient markets, but let’s not worry about that comment.
I tend to agree with the Productivity Commission that urban form changes can be slow, and by themselves may not amount to much in terms of lower emissions.
But on the other side of the coin, correctly pricing carbon suggests big, and potentially rapid (disruptive even) changes for households and businesses. The report rather shyly notes:
The mitigation policies recommended in this report could increase the costs of household energy, food and transport.
Change transport costs and urban form changes. Increase other costs and money available for housing shrinks, all else being equal. If transport costs go up, and money available for housing goes down, then expect households to want smaller sections and houses closer to public transport. Sounds like compact city.
Of course, we all might switch to electric vehicles, so higher petrol costs don’t matter; while less restrictive planning schemes will reduce land costs for housing, so some higher energy and food costs don't matter either.
What about electric vehicles? Elsewhere, others have noted that the domestic electricity grid that serves most homes is not set up to have all houses in a street recharging their vehicles overnight. For example, this is from Vector (see Note 2):
"the amount of power required to charge an EV with a long-distance battery, at home in the suburbs, would put a strain on existing infrastructure. The perception that networks can absorb the uptake of EV charging is only true for the short term while batteries have a short-range capability, customers are satisfied with long charging times and chargers are evenly distributed across the network".
An electric bus fleet may be more likely. But a bus network that meets 50% or 60% of trip demands is a lot different from the network that we have today. There will have to be a degree of clustering of homes and businesses into a multi nodal city for a network to work - less of the current dispersed pattern of home and work places , but not as concentrated as some might contend.
But wait, there is more. The Commission’s report notes that: “Transport has been the biggest contributor to New Zealand’s rising emissions over the last thirty years. Yet, the wide range of mitigation options already available for transport means it can play a greater role than other emitting sources in achieving a low-emissions economy”.
“More broadly, investment skewed towards roading and a failure to price negative externalities from private vehicle use has led to high private vehicle travel and inefficient vehicle choices. More cost-reflective pricing of vehicle externalities would lead to more efficient and lower emission outcomes. Finally, with a level playing field for investment in infrastructure, the transport system would better support rather than stifle shifts towards low-emission modes”.
So travel by private vehicle may be priced more highly for other reasons and less and less new road space built for cars. It is a double whammy - higher prices and less road space. This is quite a fundamental shift. This may be especially so for our mid sized cities - places like Dunedin, Tauranga and Hamilton, even Napier and Hastings, places without the critical mass to support good quality, frequent public transport.
What about building design and things like heating? Any pressure there to change urban form? Here I also have to agree with the Commission that building design may have less of an influence on green house gas emission than other measures. For example, there is some evidence that taller buildings consume more energy than low rise buildings (think lifts and pumps and lighting and heating of common areas like hallways and lobbies in apartments), while the larger roof area of stand alone dwellings versus people accommodated mean there is more scope for energy needs to be met by solar power, for example. Steel and concrete are ( I think) more carbon intensive building products than wood.
So a bit of a tension here between different transport modes and urban forms. Perhaps there is a meeting in the middle - 3 or 4 storey wooden apartment buildings built to conserve and generate energy, structured around a bus-based transport network. Space will also need to be found to grow food and manage wastes in less energy intensive ways. So also big changes in open space networks?
In short, urban form will respond to a high carbon price / low GHG emission society and to be fair the Commission aren’t against the planning system accommodating these ‘consumer-driven’ changes.
To me, what is more at issue is the potential contradiction with other outcomes identified by the Commission for urban planning and affordable housing; actions like more greenfields land for housing and reducing the costs of housing by freeing up urban land markets, even if that means paving over some good vege growing land. If these ‘cost reducing’ actions are taken at the same time as the measures to fully price carbon, then good. But if they are not, and the carbon price bit comes later, then there is the real prospect of a ‘shot in the arm’ for poor urban form (low density car dependent subdivisions) just before the costs of this approach start to skyrocket. This is a recipe for a major government liability.
Moreover, it is interesting that in other areas of the economy, the Commission notes the need for countervailing policies and actions (actions to slow the high carbon ship and to lessen the costs of transition to a low carbon waka). For example:
“The transition to a low-emissions economy will require policies that lean against path dependencies that can lock-in polluting technologies and patterns of production. These dependencies arise from market size, scale economies, the cumulative nature of knowledge, network effects, sunk investments and political pressures from vested interests.”
To my mind most urban development falls into the path dependent categories listed (market scale, sunk investments, vested interests). So in one area of the economy there is a need to help with a transition (a plan even!), but in another it can be left to the market. This is not to say that compact urban development should be ‘forced’, as there is a difference between help and compunction, but you would have thought that the Commission could have come up with a bit more of a considered response as to how urban areas will need to transition and the different tools and techniques needed.
I get the feeling that they got trapped by their previous reports.
Note 1: https://www.productivity.govt.nz/sites/default/files/Productivity%20Commission_Low-emissions%20economy_Draft%20report_FINAL%20WEB%20VERSION.pdf
Note 2: https://www.stuff.co.nz/business/102240245/power-network-may-struggle-to-deal-with-electric-vehicles
