Monday, December 19, 2011

The MIS ponzis - who loves a monoculture?

I am just back from the Green Triangle, from canoeing the Glenelg, four days actually, and driving via Warrnambool and then back by Byaduk and Penshurst you cannot miss the plantations, rolling like dark water over the hills and valleys mainly pine, some gum (blue gum). The soil up this way is poor for farming but fine for pine. I am guessing the pines like the acidity of limestone soils.
            Much of the planting was the result of the failed managed investments schemes Great Southern and Timbercorp. A managed investment scheme (MIS) allows investors to pool their investment and pay a manager to manage on their behalf. As I understand it investors were encouraged to take the maintenance costs out as an upfront tax deduction and that was the attraction of a managed investment scheme. Timber has the advantage as do a number of agricultural products where there are high maintenance expenses over a long period of time, in tax terms that generated a good deduction that was brought forward to the time of the investment. It seems an artefact to me, just too clever: short term thinking harnessed to a long term product. There was something of the ponzi to the way the schemes managed the funds they attracted, buying production to keep the price up. And then the tax department I have been told disallowed bringing so much of the expenses to the time of the investment and ruled that the expenses had to be deducted closer to the time they were incurred. Owww. That’s a convenient explanation but not accurate. There was tax doubt but governments and the ATO worked to reassure investors. Maybe it would have been better if they hadn’t.
            In the meantime a lot of land had been bought and a lot of trees had been planted, and not just in the south-west of Victoria but as far away as the Tiwi island, which was controversial.
            The idea of the plantations is to grow trees fast and to industrialize the farming of timber. Plantations are monocultures – one tree species spread over a landscape like a disease. The industrialization of forestry means that many forestry values, say those espoused by Aldo Leopold are destroyed. It is all about the money and systems to reduce costs. It is about shortening the forester’s traditional long vision to something as short as a tree’s life can be squeezed into. It is about industrializing forestry, which is about simplifying everything to cut costs – and also to push costs especially unknown costs into the future on to other people and future generations. A forest is not a monoculture but a living diverse ecosystem, a series of habitats, a structured mosaic of ecotopes. These plantations are sucking up water and dropping the water table. One local told me that the level of the Blue Lake at Mt Gambier had a dropped a metre. The local ecology is locked up for a long time.
            The land is only productive for two rotations of timber so some 60 to 100 years, and after that the land is depleted of nutrients and clotted with roots. Will it be useable? What are we leaving future generations? Plenty of what economists like to call “externalities”, as if these are not part of their dream of a perfect economic system.
            The MIS are a touchstone for how economics and government treats the environment, seeking short-term profit blindly. 

Hope yet for James Price Point

Economics is looking like it will stop the James Price Point hub where environmental protest have yet to succeed. $30 billion is looking like a lot in the current environment and the strong inflationary pressures in WA are pushing the likely cost up. Woodside has asked the WA government to extend the commitment deadline from mid 2012 into 2013. That increases the chances that the project just will not go ahead. Woodside's joint-venture partners - BHP, Shell, BP and Chevron - prefer the cheaper alternative of processing the gas at the existing facility at Karratha, and Goldman Sachs said that option "increases in attractiveness as time goes on". Who wants to take a big risk in today's economic climate? Woodside may just have been saved from itself by the doggedness of environmental and indigenous groups. Oh, sweet irony. Woodside chief executive Peter Coleman has tempered several of the ambitious plans of his American predecesso,Don Voelte, since ascending to the chair in May this year. The Wilderness Society says this setback is a "testament to misguided egos" of the ambitious. How does Martin Ferguson feel about that? Maybe a few people should be reading Jon Ronson's The Psychopath Test.

West Australian

Friday, September 30, 2011

CSG concerns - handy summary

Here's a handy summary about the concerns with coal seam gas extraction. The fundamental is that as the industry is new there is not much known about the medium to long-term effects of lowering the pressure of coal seams but pumping out the gas (and the water with it). Specific concerns are:

• Just how impermeable are the layers of clay separating the coal seams from the aquifers?

• Are coal seams and aquifers always separated? (And, how do you know when you start drilling?)

• Will fracking lead to coal seams connecting to aquifers?

• Will the wells leak? Will the casing seal the wells adequately (think Deepwater Horizon)? Will the wells be plugged properly (think Rum Jungle? What is the industry's record of cleaning up after itself?)

Queensland Gas Company says the majority of view of hydrologists is that over time water will always flow from high pressure to low pressure areas regardless of permeability Now here's the kicker QGC says it won't be a problem in our lifetimes. So what they are saying is lets take the profits now and lets shift the problems to the future. A case of not paying for what economists call externalities. In the ninenteenth century factories used to pump toxic waste into rivers and let those who live downstream take the consequences. Now we the downstream is the future, our children and their children and so down to the nth generation.

The concerns from farmers is the damage that CSG does to their land, to the surface of the land. The web of roads and other facilities that go with CSG extraction. It is different from other sorts of mining. And there is the problem of what happens to everything that comes out of the ground apart from the methane that is pumped away - salty toxic water.

Abuse of language

Language is used and abused to pursue particular interests. An appreciation that was reinforced for me recently when I read of plans to use 'waste' to make resin pellets to fire power plants in South Australia. The 'waste' is the pulp that will no longer go to the Tantanoola Pulp Mill (Tantanoola is being closed because it is too 'small' in a global context. Small is beautiful is not something that industry embraces.) Woodchipping started with a plan to utilize the 'waste' from logging, now forests are clearfelled and only a small proportion of the timber is actually cut into timber, most is chipped and pulped. Woodchipping spearheaded the industrializaton of logging based on 'waste', and resin pellet will continue this trend, all in the name of being green, all in the name of utilizing 'waste'. Words just slide around.

The other recent notable abuse that I came across was the statements made by Queensland State Mining Minister Stirling Hinchcliffe that fracking is a 'very small' part of coal seam gas extraction. He's right. Here's what he actually said: "The scientific advice I have is that fracking is at the moment a very small part of what's required as part of oil and gas operations here in Queensland." The scientific is a nice touch. Fracking does not have much to do with science; it is a mining operation. Using 'scientific' lends support, though. But the key is what Stirling has not said. It is what he left out. Fracking is a small part 'at the moment'. It's about 5% but that's for now; in the future fracking proportions will grow. The industry is being coy about it, and reading between the lines about 30% of mines will eventually be fracked. And my guess is that it will be much higher. It is early days in CSG extraction so not much fracking is required to extact the gas. A point the minister conveniently did not mention.

Wednesday, May 25, 2011

In praise of walking - Annie Proulx

I am reading — and very much enjoying Annie Proulx's Bird Cloud. I came across this quote this morning that resonated: "Walking induces a trancelike stat that allows the mind freedom and ease and encourages exploration of odd possibilities and improbable connections." The "odd possibilities" and the "improbable connections" in particular; that is one reason I love walking that I had yet to let surface in my mind until Annie Proulx fished it up.

Friday, May 13, 2011

The Cobberas - a wilderness area?

I am back from 4 days walking in the Cobberas, in north-east Victoria, on the other side of the Great Divide. It snowed and it was exquisitely beautiful, but I was saddened by the impact that Europeans had had on the Australian landscape. The Cobberas is designated as a Wilderness Area but driving in to the Cowombat Flat Track the presence of feral dogs was obvious as farmers had shot them and left there corpses hanging from trees. On the first night I heard the mewling of a feral cat in the dark hours of the morning. The first night on Cowombat Flat we heard the eerie and beautiful yowling of a feral dog. Everywhere was evidence of feral horses: horse shit, brumby pads, and wetlands and streams turned to quagmires. And occasionally we had a sighting of the horses themselves - beautiful. Most obviously was the damage done by the fire of 2003. Without Aboriginal mosaic burning we have intense whirlwinds of fires that leave the debris of a holocaust, and a simplified ecosystem. The Cobberas burnt in 2003. Now, since the 2009 fires, almost all of the Victorian Alps are covered by dead trees. No where can I stand on a mountain and see a sweep of green unburnt forest to the horizon. That is lost to me and to coming generations. The countryside has the look of the stubble on an unshaven face.

So what is now a wilderness area?

I took the book Bird Cloud by Annie Proulx with me and read with sadness of the same situation in North American pine forests destroyed by the "triple catastrophes of prolonged drought, warming climate and an unprecedented invasion of mountain pine beetle" She goes on to say "I am deeply sorry for all who never … looked out from a fire tower across miles of green mountain wilderness." The pleasure in that awe has been lost there, as it has been here in Australia.

Sunday, April 10, 2011

the other tragedy of the commons

The law locks up both man and woman

Who steals the goose from off the common

But lets the greater felon loose

Who steals the common from the goose. (Anon).

Saturday, March 19, 2011

plus for carbon offsets where the offset is located in a developing country

A more benign way of looking at carbon offsets is they give first world countries a self-interested reason to invest in the the ecology of developing countries.

Friday, March 18, 2011

offsets are indulgences

What hurts my head about offsets is not that they are a get-out-of-jail-for-free card (let's just keep on consuming but ease our conscience), but that you need to know that what you are spending your money on would not have been done otherwise - that methane would not have been used to generate electricity from that waste dump, or that tree would not have been planted, without my expenditure on the offset. That is really hard to assess. We are talking about a counterfactual future, what would have happened if hadn't contributed that money, and who can really answer that.

The carbon we release in driving to the beach is actual but the carbon we save is more notional. If you are subsidizing a company that gives out free energy efficient light globes - how much does that actually save is an actuarial exercise in estimation. One is happening now but the savings are projected to happen in the future.

But what if you are paying somebody not to do something in the future, like not cut down that tree. Now that's really notional. Farmers may be asking for credits for trees that they could have cut down but don't actually have any plans to.

To the cynical offsets could be seen to just be subsidizing normal activities that would have occurred in the normal course of events - and therefore increasing profits.

Offets are also used to excuse the unsustainable growth in industries say like travel that emit a lot of carbon.

There also the issue of discount rates for carbon savings which I'll deal with in another blog.

Thursday, March 17, 2011

It is less what you buy and more how you look after it that matters

It is not so much what clothes you buy as how you wash them that makes the green difference. The biggest impact of clothing on the environment is how they are washed: cold water, biodegradable washing powder and line drying are low energy/good for the environment. Hot wash and spin drying sucks up a bucketload of energy. So says Keith Colishaw a textiles expert from RMIT, quoted by Choice.

Garnaut sheds light

The smoke around Australia's carbon tax is clearing with the release of the latest update of the Garnaut report. While we still have a Labor government this report carries weight and it is being considered at a multiparty climate policy committee meeting today. Garnaut backed Labor's carbon price which is effectively a tax and it starts next year, at a price of between $20 and $30 tonnes on Garnaut's recommendation (compare EU $20.50, NZ 19.50 and forecasted for the mighty state of California:$12.95-15.95; with the global offset price being $16.95). Then we will graduate to a emissions trading scheme with a market-set carbon price.

Professor Garnaut did not think much of Tony Abbott's "Direct Action" style of approach. Abbott's plan is to select particular emission reduction projects and pay for them out of the government's coffers. Too arbitrary to win the heart of an economist. Garnaut has built in plenty of compensation for polluting export industries like aluminium and steel. They would get 90% back initially then down to 60% later. Initially that's a quarter of the revenue raised.

Tuesday, March 15, 2011

More on Reflex - the "ethical" paper

The more I peel back the layers the more layers that are revealed below. The Forest Stewardship Council (FSC) is, as mentioned in an earlier post, investigating the certification of Australian Paper the makers of Reflex. Adam Trumble, FSC's Business Manager, does not want to say too much as he doesn't want to prejudice any claims for or against the cerification but to let the process take its course. I have appended below what Adam and the FSC is prepared to say.

One item that intrigued me in this discussion was that the FSC doesn't do its own certification. That's done through an associated entity Accreditation Services International (ASI), and that associated entity does not actually do the certification either but contracts that out. Byzantinely beauracratic. There's a wrinkle in this exposed layer in that the certification for Australian Paper was done by Smart Wood, which is part of the not-for-profit Rainforest Alliance, and further that the Wilderness Society is a member of the FSC, and sits on its board. It's not a simple story.

FROM FSC Australia

The following points represent FSC Australia's position.

  • The Forest Stewardship Council sets standards for responsible forest management.
  • Organisations may seek certification under FSC forest management standards (forest management certification) or under FSC Chain of Custody Standards (for companies operating in the wood and paper supply chain).
  • FSC does not undertake certifications itself, but through an associated entity (Accreditation Services International (ASI)) authorises certification bodies to conduct assessments and audits against FSC standards.
  • In July 2006, Smart Wood (an accredited certification body and a unit of the US-based Rainforest Alliance) granted a Chain of Custody certificate (SW-COC-001966) to Australian Paper for production of specified paper products.
  • In 2009 FSC clarified requirements for sourcing non-FSC certified ‘controlled wood’ that can be mixed with FSC certified material in a ‘Mix’ label product (Australian Paper supplements its FSC certified wood sourced from nearby plantations with non-FSC certified ‘controlled wood’ sourced from Victorian state forests).
  • FSC Australia has concerns that the Smart Wood audit of Australian Paper in 2009 did not comply with FSC controlled wood requirements.
  • FSC Australia has raised these concerns with ASI in 2010, which is investigating.
  • Smartwood has since conducted a further regular audit of Australian Paper.
  • Pending an outcome of the Smartwood audit and ASI investigation, Australian Paper's Chain of Custody certificate remains valid.
  • FSC Australia does not have the ability to directly influence audit processes and therefore awaits the outcome of both the FSC International review and the Smartwood audit.

Monday, March 14, 2011

"recycled" disappointment

The consumer thinks of "recycled" as post-consumer waste, the stuff that's put out in the recycling bin for collection by the council, as recycled and don't consider that the labelling actually includes factory offcuts or pre-consumer waste. It comes as a surprise and a shock - and then a rush of disappointment: " I'm not being as green as I thought I was."

Maybe that's why Naturale only receives a grey tick not a black tick on the ethical consumer website.

Tuesday, March 1, 2011

the Hazelwood deal - looked good at the time

The cost of closing Hazelwood - Australia's dirtiest coal plant - would cost $3.8 billion. It's current value is $2.5 billion and the Kennett government and was purchased from the Victorian government for $2.35 billion.

We as Victorians made a huge windfall profit when Kennett, cleverly sold the 30 year old Hazelwood in 1996 (offering a 40 year life) for far more than it was listed at on the government books. And we have been paying for it every since. The station was due to be shut down in 2005 by the SECV.

The station has to be kept going to deliver its owners (which interestingly includes the CBA) a profit, so the government keeps agreeing to new extensions of the terms. The government is driven by fear of driving investment away.

The privatization of electricity, when we are trying to cut carbon emissions, looks daft.

Monday, February 21, 2011

Reflex answers

I spoke to the Wilderness Society, the dynamic Luke Chamberlain, who said yes there is a glut of plantation timber - due to the failed MIS forestry planting schemes. No, the Wilderness Society doesn't support monocultural plantations. Yes Australian Paper is FSC certified but there are issues about FSC certification and if you are interested in the general issues rather than issues related to Australian Paper's certification then go to: At least 85% if not more of what is logged goes to woodchips and pulp, so out of a 520,000 tonnes that is logged only 14,000 tonnes are timber grade sawn logs. To put it nicely Australian Paper may be stretching a point to say that what is pulped is the waste from sawlog production.

Friday, February 18, 2011

Chronology of the whailing wars - thanks to the Age

1946 Japan resumes Antarctic whaling for food post-World War II, with US encouragement. Australia opposes. IWC formed under the International Convention for the Regulation of Whaling.
1972 Paul Watson and others form Greenpeace and challenge uncontrolled Soviet whaling in the North Pacific.
1986 IWC final reach a moratorium on commercial whaling after numbers crash.
1987 Japan issues itself a permit under IWC to take whales for scientific research in the Antarctic
1989 First Greenpeace action in the Antarctic
1994 IWC establishes a circumpolar Southern Ocean wildlife sanctuary but Japan rejects.
2005 Sea Shepherd begins clashes with whaling fleet.
2009 Conflict with the Japanese fleet escalates - high intensity acoustics and ship boargisn
2010 Andy Gil sliced in two by whalers's security ship Shonan Maru No 2. IWC peace talks collapse.
2011 Japan cuts season short and withdraws in the face of opposition from the three fleet Sea Shepherd flotilla.

International Fund for Animal Welfare (global whales campaign manager is Paul Ramage):
Sea Shepherd;

Thursday, February 17, 2011

Dodgy campaign by the Wilderness Society?

The Wilderness Society (WS) is running a campaign against Officeworks stocking Reflex copy paper as timber from native forests is used to make Reflex . I'm a member so I got an email asking me to sign a petition. This time, I was not as enthusiastic as I am usually.

I have my doubts about the campaign. It is just too simplistic. Australian Paper is using secondary re-growth forest not old growth in the manufacture of Reflex. According to the Wilderness Society, "there is more than enough recycled and plantation wood fibre to meet our needs". Maybe, maybe not. The link from the email takes you to a website that claims that Reflex can be wholly produced from recycled paper and plantation timber with the use of plantation timber from the Green Triangle in Western Victoria. Do these plantations have excess wood that they are currently unable to sell? I imagine the volume of timber required to produce half of the stock of Reflex that is currently consumed is in fact a lot. So does this mean that more farmland will be converted into plantations, and does the WS think that plantations are a good idea? Plantations are mono-cultures - ecological deserts that can suck up water and nutrients and provide no home for birds, animals, bugs or bees. Plantations cut wildlife corridors just as much and maybe more so than logging.

Driving through a plantation landscape as I did a few years ago in the north-west of Tasmania is profoundly depressing. Little beauty and less wildlife. It's an industrialized landscape.

What we need is plantations with diversity built into them - which is pretty close to saying secondary re-growth forest that is logged on a sustainable cycle. When old growth forest is safe from any logging (which is hopefully soon), we need to think differently about secondary re-growth forest, and we want more of it. We want farmland converted into forest, and that may mean some of it will be logged. We want the number of trees on farmland increased, and that may mean that some will need to be logged to give a return to the farmer.

The WS is claiming that logging releases large amounts of greenhouse gases especially the post-logging burning. Yet Australian forests are adapted to fire - that fire is need for the seeds to germinate. We actually need fires in forests to control fuel load and to maintain biodiversity. There are also studies that show that mature forests potentially store less than a growing forest.

Here's a few points in Reflex's favour:
It is 50% from recycled or plantation sources.
Australian Paper (and Officeworks) have a 100% recycled option. WS could say next time you go to Officeworks support environmental policies by buying this option. Demand can do the talking.
It is FSC certified. A good chunk of the office paper we use is imported from uncertified forests in Indonesia, China and Thailand. This is what our tropical rainforests are being turned into. Are any of the other brands stocked by Officeworks from these environmentally unsound sources? Reflex creates Australian regional jobs, with a commitment to environmental standards. Is Reflex then the right target?
It is made from wood that is a by-product of operations to produce high quality sawlog and the sawlog is added value timber that is a longer term storage of carbon than the paper made from the trunks of plantation trees.

I did ring the Wilderness Society. The person I spoke to did not have an answer to my queries and gave me the number of the campaign manager but I'm yet to have my call returned. In calling Reflex ''ethical paper" Australian Paper were being provocative. How can paper be "ethical"? It's inanimate. The WS needed to think their response through.

I am left wondering if this is a knee jerk reaction, comfortably targeting old foes and diverting resources from better campaigns. It seemed overly simplistic to me.