Michael Kremer and O-Rings

Congratulations to Abhijit Banajee, Esther Duflo and Michael Kremer for their well-deserved Nobel Prize!

Kremer’s paper The O-Ring Theory of Economic Development (1993) is both dated in allusion and timeless in its deeper meaning.  It argues that high skill workers in sequential processes cooperate to minimise errors that would otherwise destroy output value.  The “O-Ring” alludes to the Challenger space shuttle disaster that occurred when just one part – an O-Ring – failed on launch.  Only those of us of a certain age remember it vividly with sadness for the astronauts who “slipped the surly bonds of earth to touch the face of God…” in President Reagan’s words.

Kremer argues correctly that skilled workers cluster together, that quantity cannot substitute for quality, and that small differences in worker skill lead to large wage and productivity differences between countries.  The argument resonates with Lucas’s rationale for why skilled people move not to where skill is scarce but to where it is plentiful.  Highly skilled people lift others’ productivity.  Furthermore, a chain is only as strong as its weakest part – a rocket is only reliable when all the key components work effectively.

Kremer uses his model to help explain why agriculture is associated with low economic development levels.  He argues that countries with high skill workers specialise in products that require expensive intermediate inputs and countries with low skill workers “specialise in primary production” with poverty associated with it.

Historically, agriculture was an industry that permitted large error margins.  Shepherds could pipe on oaten straws oblivious to time – including “just in time!”  Illiterate and innumerate workers could find work because their low skills did not create “O-Ring” like risks.  Those days are now over, and on this point Kremer’s wonderful paper needs to be updated.

A low skill worker who causes a food safety or biosecurity failure at any point in the supply chain can cause massive damage to our food and fibre exports.  These supply chains are under social media and other scrutiny. The “O-Ring risks” are ethical and psychic as well as safety, surety and security-related.  Animal welfare, working conditions and environmental impacts all impinge on what is allowed in markets let alone creating value in such markets.


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The worlds a stage, from Ira Aldridge, Paul Robeson to Justin Trudeau

That a Canadian Prime Minister is red-faced in the media after wearing blackface eight years ago shows benefit from Shakespeare spending the last four hundred years breaking down skin colour typecasting.

Shakespeare challenged racism in The Merchant of Venice and Othello. Both plays are set in Venice, in Shakespeare’s time as much a centre of European culture as New York is now.  Othello is a black man valued for his military prowess, Shylock a Jew for his money-lending, with both of them otherwise excluded from Venetian society.  Both plays portray the fundamental unity of humanity.

For hundreds of years white actors portrayed Othello, with the play labelled as “about jealousy, the green-eyed monster”.  Othello is not about jealousy.  It is about race, identity and an individual’s dignity.  Othello before he stabs himself asks that those surviving him “Speak of me as I am…” rather than as a stereotype from which group characteristics can be inferred. – see link at: https://www.youtube.com/watch?v=J9tg4Q-cg44

Black actors took to the stage to break down racist barriers from at least the 1820s.  They understood that all the worlds a stage, and that actors were the “abstract and brief chronicles of the time” who helped shape cultural and social attitudes.

William Henry Brown established the first known black theatre company in the US, The African Theatre, in 1821.  It performed Shakespeare plays to segregated audiences.  Its leading actor was James Hewlett – the first black professional actor to perform in America.  Hewlett played Richard III and Othello.

In 1824 an English “comedian”, Charles Mathews burlesqued The African Theatre in his solo show, “Trip to America”. In one skit, a black actor delivered a garbled version of “To be or not to be,” changing the line “by opposing end them” to “by opossum end ’em.”

The African Theatre company was forced out of business by hostile white people and authorities, with the theatre house being burnt down in 1826.

Ira Aldridge (1807 – 1867) was an American-born actor who made his career after 1824 largely in London and Europe.  He is the only African-American actor among the 33 actors of the English stage honoured with bronze plaques at the Shakespeare Memorial Theatre at Stratford on Avon.

In 1825 Aldridge made his London debut, becoming the first black actor in Britain to play Othello.  He was 17 years old, portraying a black man eight years before slavery was banned throughout the British Empire and 40 years before his native country fought a civil war to abolish slavery.

Aldridge later began playing white characters, including Shylock in The Merchant of Venice. In The Siberian Exiles, performed in 1831, Aldridge played a white man who was disguised as a black. Drama involves people pretending to be someone they are not.  The audience must be complicit in this deception and see who an actor is imagined to be, not who he is in real life.

In tours in Britain in the 1830s Aldridge began donning “whiteface” to portray roles as diverse as Shylock, Macbeth, Richard III, and King Lear. When Thomas Rice arrived in England with his racist “Jump Jim Crow” minstrel routine, Aldridge wove one of Rice’s own skits into his show.  By parodying the parody, he disarmed Rice’s racism.

In 1916 the Harlem Lafayette Players performed Othello with an all-black cast to commemorate Shakespeare‘s death. In 1930, Paul Robeson assumed Aldridge’s mantle by playing Othello in London.  Amanda Aldridge, Ira’s daughter was in attendance, and gave Robeson the gold earrings her father had worn as Othello.

Paul Robeson played Othello on Broadway in 1943 with huge success.  However, segregation stopped him performing in the South.  Robeson recognized that Shakespeare foreshadowed and understood future challenges of black people in racist environments, and that Othello conferred dignity on black people – see link at: https://www.youtube.com/watch?v=-DF7YQrC7HM

Charles Mathews and Thomas Rice’s blackface “entertainment” degraded black people, while Trudeau’s actions have embarrassed only himself.   This shows progress in the struggle against racism and “otherism” that is blind to individuality and personal dignity, and sees only the delusion of group type.  It also shows Shakespeare’s prescience, and highlights the sense that he is always ahead of us, preparing us to grapple with future challenges we may only be dimly aware of.


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The evolving Treaty of Waitangi discourse and its wider benefits

The Hobson’s Pledge group argues that the Treaty of Waitangi is an equal rights, colour-blind and unifying document.  Governor Hobson greeted each chief signing it with the pledge:  He Iwi Tahi Tatau, “We are now one people”.

It is true that the Treaty itself does not create superior rights for Māori.  However, statute law that Parliament enacts can create additional rights such as Māori-specific educational or health entitlements.  Such laws come from democratically-elected Parliaments, not from the Treaty.

The Treaty of Waitangi was drafted in English, and the missionary Henry Williams translated it into Māori. When chiefs debated it, Williams clarified various points. He told Māori that they would be “one people with the English, in the suppression of wars, and of every lawless act; under one Sovereign, and one Law, human and divine”.  The “divine” was left out of the text – the Treaty is a secular document.

The Treaty is ahead of its time.  It has also shaped our times, including our evolving constitution and social norms.  Treaty-based advocacy, rather than creating race-based privilege has strengthened New Zealanders’ common law rights.  It has protected against uncompensated regulatory takings. It has fostered cultural inclusiveness and therefore requisite variety through which New Zealanders can engage better with diverse ethnicities and world views.

The Treaty has a preamble and three articles.  The preamble states the need for a central government and rule of law.

Article One transfers sovereignty (kawanatanga) over New Zealand (Nu Tirani) to the Crown.  Treaty discourse sometimes asserts an equal Crown-Māori partnership.  Queen Victoria did not enter into equal partnerships with the British aristocracy, let alone with remote tribes!  There was never an exclusive equal Treaty partnership between the Crown and Māori.

The Treaty gave Māori equal rights with Pakeha from 1840, except for Treaty restrictions on Māori land sales set out in Article Two.  After 1840, other provisions for Māori were created through statute law, not through the Treaty.

Since 1840, New Zealand’s constitution and polity has democratized and decentralized power.  Crown (or rather Parliamentary) powers are now controlled by elected lawmakers.  Rather than having an equal partnership with voters, elected lawmakers are subordinate to them because voters of all ethnicities can hire and fire them every three years.

Article Two transfers Magna Carta and English common law property rights to Māori.  These tino rangitaranga rights over land and other properties (taonga) were given explicitly to individuals and whanau as well as chiefs and tribes.

Some words used in the Treaty have changed in meaning since the early 19th century.  Hongi Hika used “taonga” to refer to tangible “property procured by the spear.” However, taonga can now include cultural “properties” such as language.

Treaty-related discourse has supported statutory recognition of, and funding for Te Reo.  Māori language is now part of New Zealand identity. Pakeha use Māori terms such as arohanui and kia kaha to express feelings ineffable in English.

Te Reo revival has indirectly fostered the case for teaching Asian and other languages.  This has helped build respect for other cultures.  Māori cultural assertions have led to new educational models such as Kohanga Reo and Wananga.  Other cultural assertions led to faith-based (Catholic) or pedagogy-based (Rudolf Steiner) schools.  The common principle in such cultural assertions is the need for self-expression in an inclusive society.

Article One establishes Crown sovereignty and statute lawmaking powers, while Article Two protects common law property rights at the individual, family and tribal levels.  A critical principle is that where there is a conflict between a statute and common law then statute law prevails.  However, in such cases due process must be followed and compensation may be paid for regulatory takings.

The Bastion Point dispute in the 1970s saw Māori exercise their common law rights.  The seabed and foreshore issue from 2003 saw Māori exercise Article Two common law claims and Parliament exercising its statute law powers to moderate these claims to protect perceived public interests.

The only part of the Treaty that reduces Māori rights compared to other New Zealanders’ is the Article Two provision giving the Crown the right to buy Māori land as a monopolistic purchaser.  This right reduced the prices that Māori might have realized from land sales.  This Crown pre-emption clause is the only part of the Treaty which is now outdated.  However, it was justified in the 1840 context where there was widespread fraud, and confusion over who owned what and who had rights to trade in land.

Article Three confers on Māori the rights and privileges of Crown subjects, and extends to them the Crown’s protection. In the Raglan golf course case in the 1970s, the Crown had taken over Māori land for an airbase in World War Two.  It was justified in doing so, given the existential threat that New Zealand faced at that time.  Article Three commits the Crown to defending Māori (and other New Zealanders) from external threats.  However, with the end of the War the Crown failed to return the land, and therefore breached Article Two common law rights.  The land was returned.

The Treaty of Waitangi is, together with the New Zealand Constitution Act 1852 a founding document for New Zealand as a British colony.  In 1907 New Zealand ceased to be a colony and became a Dominion with more self-governing status within the Empire.

New Zealand acceded to the International Convention on the Elimination of All Forms of Racial Discrimination 1969. The New Zealand Constitution Act 1986 saw Parliamentary sovereignty established, and the Crown reduced to a procedural and symbolic role.  However, the Treaty has influenced how Parliamentary sovereignty has been exercised through, for example, the Māori seats.

When Māori assert Treaty rights they often act indirectly for all New Zealanders.  Since the Treaty is an equal rights document, any right upheld or created through Treaty litigation can create a common law right that is extended to all.  This explains why Pakeha farming and fishing interests have typically supported Māori rights.  In future, Treaty-related common law arguments will help us to navigate tension between rights to farm and the state assigning social licences to farm.

Māori have often led in environmental protection, most notably for water quality.  An example was in 1981 when the New Zealand Synthetic Fuels Corporation (Syngas) was given permission to build a marine outfall for its Motonui plant.  At this time sewerage, meat works and industrial waste was being discharged into waters near Waitara.  This was culturally offensive to Māori and threatened their fisheries.  Local Pakeha also disliked it.

Te Atiawa challenged Syngas, and as a result new treatment plant was built to reduce pollution.  This case led to wider water quality protection benefiting all.

Treaty arguments have also protected historical and amenity values.  In 2002, Ngāi Tāmanuhiri challenged the sale to an oversea buyer of Te Kurī a Pāoa (Young Nick’s Head).  They highlighted the site’s historic value to themselves and to Pakeha.  After negotiations with the new owner, the headland became an historic reserve and public access was retained.

Māori are increasingly leading on New Zealand’s sustainability and climate change challenges.  Tuhoe are working with Opus on a tree resin alternative to petroleum-based asphalt road sealing in their rohe.  Inalienable Māori land that cannot be sold forces owners to manage inter-generationally for sustainable returns rather than one-off capital gains.  The iwi-owned Parengarenga Incorporation in the Far North is experimenting with biochar to improve soil sustainability and carbon sequestration, while delivering productivity benefits.  The iwi is on an inter-generational journey with its whenua.

In recent times, conferring rights on rivers and other ecosystems reflects human indivisibility with nature.  This way of viewing the environment is consistent with modernist and mainstream international science and philosophy.

An equal rights constitution does not of itself deliver equity in social outcomes.  The Treaty and other constitutional documents may not be the right framework within which equity can be addressed.  However, the social cohesion spirit that can be inferred from a “one people” Treaty narrative sits uncomfortably with inequality of opportunity in New Zealand.

Treaty of Waitangi settlements have so far focused on iwi or hapu on the assumption that these collectives will act for all their members.  What is lost sight of is that individuals are specifically mentioned in Treaty Article Two, yet Treaty settlements have not been made to individuals.  In a future post, this issue will be discussed.

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What is matauranga Māori?

“The duty of the man who investigates the writings of scientists, if learning the truth is his goal, is to make himself the enemy of all he reads, and…attack it from every side”

Ibn al-Hatham (Alhazen), Islamic mathematician, physicist and polymath 965-1040

A communication principle is that language should have exact and unambiguous meaning.  “Matauranga” means “knowledge, skills or wisdom”.  “Matauranga Māori” implies knowledge, skills or wisdom that Māori hold uniquely, or at least have special interests in.

Some argue that matauranga Māori includes a knowledge creation method that is distinct from “western science”.  However, much science has its origins in Asia and the Middle East, not “the West”.  For example, Ibn al-Hatham who was born in Basra and lived in the 10th century was a mathematician, physicist and polymath of Newton’s calibre.  The science now undertaken in Chinese and Japanese universities is methodologically akin to that in the US and Britain. That is, modernist science is not culturally or geographically distinctive.

Knowledge should not be confused with customary traditions or beliefs.  Knowledge can be derived and transferred in culturally-distinctive ways.  However, it must be falsifiable through international peer review and replication before it can be validated as “truth” rather than as belief, custom or assertion.

Modernist mainstream science includes cultural learning through observation and trial and error improvements, and is transmitted through intergenerational cultural pathways.  For example, ethnobotany is common practice across all cultures. It has underpinned plant breeding and drug discoveries over thousands of years.  It is validated through modern scientific methods.

Matauranga Māori as it relates to the natural world seems to have three main principles that concur with modernist science:

Humans are part of nature and subject to it


We must be humble – no “O what a piece of work is man”.  If we mistreat nature through biodiversity loss and carbon emissions there will be consequences…

Knowledge builds from and through past foundations

Intellectual whakapapa and ethnobotany echo Newton “standing on the shoulders of giants”, and Darwinian evolution.  We respect our blood as well as our intellectual ancestors.  What they achieved provides foundations for new learning.

Deep scientific understanding is multi-disciplinary

Deep understanding such as of ecology, wellbeing economics and climate change is multi-disciplinary, cross-cutting, interwoven and integrated.  It is not contained within narrow specialised silos.

Science is a universal and public activity that transcends cultures.  Culturalism – the idea that individuals are determined by and cannot leave their own closed and exclusive culture – impedes the learning flows that are essential for scientific advances.

There is no such thing as “Māori science”, “Jewish science” or “Western science”.  Scientific knowledge is only “truthful” when it is validated empirically and through replication across cultures.

So let’s celebrate “matauranga Māori” through more of our brightest Māori and other New Zealanders committing to “modernist science” of a form that translates as “matauranga Māori” – and which also translates into every other language, while still having the same exact and unambiguous meaning…

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Submission on Climate Change Response (Zero Carbon) Bill


Thank you for the opportunity to make a submission on this legislation.

My submission is in three parts:

  • a comment on the climate change strategy New Zealand should pursue
  • the case for negative emissions technologies (NETs)
  • specific amendments suggested to the draft legislation

Overall New Zealand climate change strategy

New Zealand has among the world’s highest per capita endowments of renewable energy.  This includes geothermal and hydro where we are exploiting most of our potential large-scale capacity.  We could develop much more small-scale hydro and geothermal heat pump capacity.  We can develop much more wind and solar power.  Intermittency issues can be solved with clever use of existing technology.

We can improve home and building insulation and energy efficiency.  Bioenergy and electrical energy can replace most fossil fuels in industrial processes. The benefits are economic as well as environmental.  For example mass adoption of electric vehicles would save New Zealand billions of dollars a year in imported oil, as well as reduce carbon emissions and improve air quality.

Both distributed electricity generation and pyrolytic carbon capture and storage (PyCCS) are diffuse rather than centralised technologies, which will benefit regional New Zealand.  Distribution energy production needs regulatory facilitation. For example, the Commerce Commission could be more active in using 54Q of Part 4 of the Commerce Act to foster sustainable electricity production and efficiency and distributed generation systems.  Feed-in tariffs for renewable electricity generation led to massive uptake of these technologies overseas, for example in Germany.

Current climate change policy thinking puts too much emphasis on ruminant methane.  Key New Zealand industries such as dairying can flourish sustainably if we use pasture management changes and biochar to reduce nitrous oxide emissions and lift permanent soil carbon sequestration.  While it has a higher short-term warming effect than carbon dioxide, methane is a flow issue more so than a stock issue because of its short life.  Therefore reducing ruminant methane emissions is less important than reducing nitrous oxide and net carbon dioxide emissions.

The case for negative emissions technologies (NETs)

The IPCC notes that even massive reductions in carbon emissions will be inadequate to achieve carbon neutrality by 2050.  Large-scale atmospheric carbon dioxide removal is therefore needed to prevent overshooting the 1.5°C temperature threshold.

The options for negative emissions technologies (NET) are limited and in most cases are costly and generate no economic benefits.   Enhanced Weathering and Direct Air Capture with Carbon Storage (DACCS) are unproven, capital and energy intensive and deliver no wider productivity benefits.  DACCS also creates risks in secure storage of carbon dioxide.

Planting trees sequesters carbon, but only while the trees are growing.  While commercial softwood forest carbon sequestration curves flatten out in around 30 years, lowland native forests keep sequestering carbon over longer time-periods.  When carbon in tree roots and forest soils are included, mature kauri forests have the world’s second highest per hectare carbon storage in the world – behind only Eucalyptus regnans with acacia under-storey.


However, if forests are permanent they deliver no economic benefits from harvest.   If trees are harvested, some carbon is sequestered in long-life wood products such as housing, however most is lost.  Furthermore, forests are vulnerable to climate-induced risk such as drought, fire and disease.


Soils contain more carbon than both terrestrial plants and the atmosphere combined.  However, biological processes break down biomass and release carbon dioxide into the atmosphere.  Different agronomic and pasture management techniques can sequester more soil carbon, however these quickly reach limits.  Most soil carbon turns over within a few weeks or months and is released in the atmosphere as carbon dioxide.  Biochar differs because it is a stable carbon form retained in the soil permanently.  It also delivers productivity and environmental benefits.


The October 2018 IPCC special report highlighted Pyrolytic Carbon Capture and Storage (PyCCS), that is biochar, as a promising negative emission technology (NET).  PyCCS can therefore be a core NET, and it can also create economic value.


Pyrolysis can convert forestry, agricultural, horticultural, vineyard, municipal and other waste into something valuable.  Biochar reduces nutrient loss, improves nutrient recycling, increases soil life and enhances soil productivity.   It reduces nitrous oxide emissions and reduces nitrate pollution in water.  It enhances compost’s effectiveness. It purifies waste water.  It remediates contaminated soils.  It can be used as an animal feed additive for animal health issues and to reduce methane emissions. Above all, biochar can store carbon in the long-term, mitigating global warming.

Biochar is a “cascading use” technology.  As a specific example, making biochar produces energy that can be used in industrial processes.  The biochar can then be used to filter nutrients out of waste water.  The nutrient-enriched biochar is then added to soil, lifting productivity.  The final cascading use for this biochar is as a long-term carbon store in soil.

Biochar offers particular opportunities for the dairy industry.  It can reduce nitrous oxide and in some cases methane emissions and reduce nitrate damage to waterways.  Biochar can convert nutrients that would otherwise be lost into productivity gains.  It also has animal health benefits.  After achieving such benefits it then ends up as a permanent soil carbon store which can be offset against other GHG emissions including methane.

PyCCS will take off and have productivity and well as a carbon storage benefits in New Zealand when two conditions are met.  Firstly, a financial value must be placed on long-term biochar carbon sequestration in soil.  Secondly, a quality assurance certification system must be put in place. This will certify how particular biochars are made and from what biomass, and verify biochar properties as they relate to specific uses.  This could be based on the European Biochar Certificate, on an Australia system that is being established, or could be designed specifically for New Zealand’s circumstances.

When these conditions are in place they will stimulate and give direction to the research and innovation to apply biochar widely to our productivity, climate change mitigation and environmental sustainability strategies.  Early success will breed more success, and as scale is achieved biochar costs will drop dramatically allowing wider application. Combined Heat and Biochar (CHB) systems are well demonstrated overseas and reaching commercial maturity, thus demonstrating one pathway to lower production costs.


Specific amendments

It is suggested that offshore mitigation should be removed as an option and the draft legislation amended accordingly.  It is too difficult to avoid corruption and negative unintended consequences from offshore mitigation.  Verification is insurmountably difficult for some emissions mitigation technologies and claims.  Institutional integrity is lacking in some jurisdictions and in some industries.

Furthermore, offshore mitigation reduces pressure on New Zealand industries to transform their productive processes and make them sustainable.

To build visibility of and create opportunities for negative emissions technologies such as pyrolysis carbon capture and storage the following specific wording additions (in italics) are recommended:

Section 4 amended (Interpretation)

Net emissions means gross emissions combined with emissions and removals from land use, including long-term soil carbon including biochar sequestration, land use change, and the forestry sector

Part 1A

5B Purposes of Commission

  • (including through reducing emissions of greenhouse gases and storing carbon long-term in soil and other terrestrial environments)

5S net budget emissions means gross emissions, offset by removals including long-term carbon storage in soil and other terrestrial environments



(d) …removals including carbon storage in soils and other terrestrial environments..



(b) measured removals, including long-term carbon sequestration in soil an other terrestrial environments

Supporting links

In support of this submission the links below are to two posts on pyrolysis carbon capture and storage (7 June 2019), climate change strategy (4 January 2019) and a paper on biochar and bioenergy production (2007).







Peter Winsley


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Biochar is an effective negative emissions technology: so what are we waiting for?

The IPCC notes that even massive reductions in carbon emissions will be inadequate to achieve carbon neutrality by 2050.  It states that “there is additional need for large-scale atmospheric carbon dioxide removal (CDR) to prevent overshooting the 1.5°C temperature threshold”.  Given that soils contain more carbon than both terrestrial plants and the atmosphere combined, it is therefore surprising there is so little focus placed on biochar as a carbon sink.

The October 2018 IPCC special report highlighted Pyrolytic Carbon Capture and Storage (PyCCS), that is biochar, as a promising negative emission technology (NET).  Natural biological processes break down biomass and soil carbon releasing carbon dioxide into the atmosphere.  Biochar differs because it is a stable carbon form that is retained in the soil for the long term. PyCCS can therefore be a core NET to solve humanity’s great existential threat – climate change.


What is biochar?

Pyrolysis turns biomass into charcoal (biochar) and also produces biogas and bio-oil by-products.  The biochar is added to soil to improve productivity and store carbon for the long-term.

Charcoal is often found in soils, made by grassland and forest fires and retained over millennia.  This natural biochar is at high levels in some of the world’s most valuable agricultural soils: the Russian Chernozem and the US Mollisols. However, intensive agricultural practices and deforestation have effectively mined carbon from many of the world’s soils, and modern industrial agriculture has become heavily dependent on synthetic fertiliser inputs.

Using charcoal in soils is an ancient technology used to restore carbon and to lift agricultural productivity.  In tropical soils plant material rapidly breaks down and releases carbon into the atmosphere.  Amidst low fertility Amazonian oxisol soils, indigenous people created rich Terra Preta soils over centuries.  These soils began as dumps of food scraps, manure and sewerage waste, ashes and charcoal.  Over decades these dumps matured into highly productive soil oases within tropical soil deserts.

Asian countries have a long history of using biochar in soil.  Rice husk biochar has been used since the beginning of rice cultivation in Asia.  Biochar is used in Europe and Asia as a feed ingredient for animal health purposes and to lift animal productivity, with the biochar then returned to the soil through manure and other waste.

What is biochar used for?

Biochar’s surface area, porosity, conductivity and other characteristics make it a general purpose substance with multi-purpose functionality in diverse applications.  It can remove pollutants and yet retain water.  It can help recycle nutrients and upcycle waste.  It can immobilize at times and catalyze at other times.

Biochar production technologies can convert agricultural, horticultural, vineyard, municipal and other waste into something valuable.  Biochar can reduce nutrient loss, improve nutrient recycling, increase soil life and enhance soil productivity.   It can reduce nitrous oxide emissions and reduce nitrate pollution in water.  It can enhance compost’s effectiveness. It can be used to purify waste water.  It can remediate contaminated soils.  It can enhance the functionality and lifecycle environmental benefits of construction, food packaging and storage materials.  It can be used as an animal feed additive, colouring agent, and as a low cost and more sustainable material for activated carbon. It can also be used in carbon black, in paints, medicines and as a decontaminant in biogas production. Above all, biochar can sequester carbon over the very long term.

Why is biochar not promoted as a core negative emissions and sustainability technology?

Biochar is one of the most important technologies we have to counter anthropogenic global warming and contribute to sustainability.  Given this, how can we explain why biochar has not been developed and applied widely?

Governments respond to concentrated lobbies, not individuals working in isolation.  Technocrats seek centralised solutions to complex problems that in fact require a society-wide and decentralised response. Fund technology to refreeze the North Pole!  Ocean iron fertilisation!  Stratospheric sulfate aerosols!  Deflecting solar radiation with space-based sunshade mirrors!  Such technological interventions come from those who presumptuously assume they can act for the planet without an inclusive mandate to do so.  Such technological fixes are unlikely to be acceptable even if they were practical.  They would inevitably come with unexpected environmental downsides.

As with distributed electricity generation, biochar technology would decentralise economic power away from the cities and to the regions. Biochar can be a tool for hundreds of thousands of individuals, communities, cooperatives, farmers, horticulturalists and small holders and cannot be monopolised by a few large companies.

Vested industries defend their financial interests by “buying science”. The science peer review process entrenches specialised disciplinary silos.  Few scientists can work across disciplines. Soil scientists and agronomists have bravely driven biochar research, however this has not been well connected to other fields such as climate and atmosphere science, animal health research, material science, and above all to climate change policy making.  Although tens of thousands of pyrolysis and biochar papers have been published, few are linked to climate change science that is core to IPCC reports and they are therefore not integrated into climate change policy responses.

Politicians and officials focus on attempts to create enforceable international agreements based on market trade principles.  For emissions markets to function effectively, the units have to be measurable, the train of transactions visible, and the trading rules enforceable.  Climate change mitigation rules can favour what is measurable at the expense of what can be most effective.  Soil carbon can be measured, however is difficult to predict with precision how long a specific biochar product will store carbon in a particular soil.  Likewise, it is difficult to predict carbon’s likely storage life in solid wood products.

How does biochar compare with other Negative Emissions Technologies?

Direct Air Capture with Carbon Storage (DACCS) and Enhanced Weathering have yet to be proven scalable, will be costly, produce no spin-off benefits, and may come with environmental risks and other unintended consequences.  Planting trees sequesters carbon, but only while the trees are growing.  If retained as a permanent forest the amount of carbon trees sequester is eventually capped.  If trees are harvested, some carbon is sequestered in long-life wood products such as housing, however most is lost.  Non-biochar soil organic matter can be enhanced through different agronomic and other techniques, however these have limits beyond which soils are saturated, and some techniques can reduce productivity.

In contrast, biochar can be used for a wide range of economic purposes and then be stored in the soil as a long-term carbon store.  This effectively involves “cascading uses”.  For example, making biochar produces some process heat and bio-oil that can be used for example in industrial processes.  The biochar can then be used for many different purposes such as waste treatment.  The nutrient-enriched biochar resulting from its waste treatment use then cascades down to its next use in lifting soil productivity through fertilisation and enhanced nutrient recycling to reduce nutrient loss.  The final cascading use for this biochar is its long-term presence in the soil.

What we should do to make biochar happen in New Zealand?

Biochar could become the world’s single most important negative carbon emissions technology.  New Zealand is well placed to lead in biochar because we are a biologically-based economy and biochar can target our key environmental challenges.  These include biochar reducing nitrous oxide emissions from pastoral farming, reducing nutrient loss, and building up soil carbon stores to offset emissions.  Pyrolysis can turn forestry, horticulture and intensive animal industry waste streams into valuable products.

To make biochar happen in New Zealand we need to recognise it in our international climate change commitments as a NET.  We need a Certification scheme to ensure the right biomass is turned into biochar and matched to the right uses and that it is sequestered in the right soils.  This could be based on the European Biochar Certificate that ensures safe, sustainable and fit for purpose biochar production and use through the lifecycle.

We need New Zealand-specific research to match biochar from specific biomass products to particular soil environments for specific productive purposes. This research must translate into technology that is applied in productive systems.

In future posts I will address these research and technological opportunities in the context of specific New Zealand industries.

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Second best policy in an MMP world can be first best in the real world

When the electorate will not support capital gains, wealth, inheritance or land taxes, how can we enhance equity?

The top priority is to lift productivity to make everyone on average better off.  How can this be done equably, within constrained policy space?

An ideal “first best” policy mix might be compulsory savings, a capital gains tax, and more optimal human capital policy settings impinging on NZS eligibility age as well as on education and immigration.

Compulsory saving can lift domestic savings rates to lift labour productivity, reduce the real exchange rate and improve export competitiveness.  Deeper and more patient capital markets would foster the growth of knowledge-intensive firms owned and anchored in New Zealand.

Capital gains taxes can reallocate capital from inflating property prices into wealth-creating tradeable sector investment.  Lifting the NZS entitlement age would free up money to invest more in educating those too young to vote.

Though such policies would be politically self-immolating, the outcomes sought could be achieved through “second best” policies, through focusing on multiple objectives with single policy instruments, through rethinking capital and labour dichotomies, and through enhancing active knowledge flows:

Second-best policies

Lipsey and Lancaster’s 1956 paper The General Theory of the Second Best addresses the challenges faced when one market failure cannot be solved to achieve optimality.  In such cases, it may not be wise to seek optimality in solving other market failures.  The best policy might therefore be second-best interventions.

For example, ideally a binding global agreement should place a cost on greenhouse gases and allow markets to drive emissions reductions to achieve an optimal mitigation response.  However, if this first-best policy is unachievable we must look to second-best policy such as forest planting, and interventions to encourage electric vehicles, distributed generation, bioenergy, biochar, and building in wood.

A capital gains tax might be first-best policy, however equity can be progressed through augmenting owner-occupied housing with new state, social and private rental housing models that can deliver affordable and secure housing.

To overcome capital misallocations, the state can invest in a targeted way in knowledge-intensive firms to ensure they are capitalized for long-term growth and anchored in New Zealand.  Such a policy would be second-best in California or Texas, however it might be first best in capital-light New Zealand.

The 1972-75 government introduced a first-best, retirement-focused compulsory savings scheme.  Were it not abandoned when the government changed in 1975 New Zealand would have avoided premature industrialization and be a much richer country today.

While the New Zealand Superannuation Fund and Kiwisaver are both “second best”, collectively they form a strong foundation to build from.  They could be augmented by savings and investment interventions that are geared towards human capital development and to tradeable sector capital formation.

Multiple objectives with one policy instrument

The Tinbergen Rule argues that for each policy objective at least one policy instrument is needed.  Many policy interventions can be used, however one will always be better than the others.  This rule has been dogmatically interpreted to mean “one policy instrument for one policy objective” – Tinbergen had a finer mind.

Mixed objectives can dissipate effort, and make performance management more difficult.  This thinking influenced the 1980s and beyond state sector reforms; often for the better.  The Reserve Bank was given an inflation band target as its major objective, and the OCR mechanism as its main lever.

Government trading activities with economic, employment and regional development objectives were corporatized and given a single commercial objective.  This led to significant productivity gains.  However, it also led to ideological overreach as privatization and offshore asset sales meant New Zealand sold its banking and insurance sectors at a time when the service sector was growing and becoming more knowledge-intensive.  We blundered down the deskilled low road when we could have chosen the knowledge-intensive high road.

Multi-functional land management was replaced with single-purpose conservation, forestry and farm land use models. This contrasts for example with multi-functional forestry in Germany and Scandinavia which has supported economic, environmental and amenity value services for centuries.

Some interventions can have a dominant objective, while allowing flexibility around individual circumstances, or allowing other objectives to be progressed.  An example is the ability to draw down KiwiSaver for home ownership.

It is also possible to use one instrument to promote multiple objectives that deliver optimal societal benefits even where some objectives will be delivered sub-optimally.  For example, Singapore-style individual development accounts can support education, life-long learning, health, home ownership and retirement savings, while also lifting overall domestic savings rates.  Draw-down from these accounts depends on an individual’s needs and life-stage.

Rethinking capital and labour dichotomies

Thomas Piketty uses capital and labour shares as equity indicators – when the returns to capital exceed economic growth rates equity falls.

However, capital and labour overlap.  Education creates human capital, and returns from it can exceed those from land, rental property and other capital investments.  Wage and salary earners also receive income from capital investments they make through Kiwisaver or shares. The value of knowledge-intensive firms can largely be intangible capital (skilled workers and intellectual property) rather than physical capital (plant and equipment).

Given advances in digital technology, computing and artificial intelligence, on-line learning, and economically tractable big data the lines between human and physical capital are likely to blur even further.

Investment in human capital is the best way to lift productivity and enhance equity. Critical investments include literacy, numeracy and digital skills capabilities that provide the foundation for deeper learning and for multi-disciplinary connections.  Effective learning will increasingly require distilling useful knowledge from otherwise overwhelming information overload, and ensuring that learning directions support individual life-narratives.

Enhancing productive knowledge flows

Economics is about individuals with their evolved human psychology and computational powers, self-interest, and the information flows and decision making that harmonize individual and social benefits.

That information is imperfect, distorted in transmission and asymmetrical is core to economics.  This shapes our institutions, laws and regulations, consumer behaviour, student choices, market structures, and how we deliver services.  Information failings have catastrophic consequences.  The 2008 Global Financial Crisis came partly from the loss of publicly visible transaction records that linked derivatives to the real property underlying their value.

Enhancing information flows in ways translating into productive knowledge has massive wellbeing potential. It requires moving as close as possible to complete and symmetrical information that is construable and acted on in social value-creating ways.

Enhancing productive knowledge flows needs filtering devices and choice architecture to focus human construal and computational power on what creates value.  For this to work for society as a whole it needs to create mutual benefits.

We face new challenges – and opportunities.  The Internet has turned an information-constrained world into one overwhelmed by information that is difficult to navigate and draw meaning from.  People who managed bounded rationality through rule of thumb heuristics and satisficing now face boundless distractions that obscure what matters.

Interventions to enhance productive knowledge flows need underpinning principles; religious or secular.  When selling houses and used cars the Golden Rule tells the saint-like among us to show buyers the borer in the roof beams and the parts held together with duct tape.

The Islamic gharar principle constrains trade with high uncertainty, for example when the buyer does not know what she bought, or the seller what is sold.  An Islamic scholar defined gharar as something that has “a pleasant appearance and a hated essence”.

For secular good citizens information flows must strive for mutual and equitable benefits, be based on respect for others, and integrity in every transaction.  At a minimum it means “do no harm” whether in our free expression or through what we keep private.

Therefore, those who despair of improving New Zealand’s productivity and well-being through tax policy changes can take heart from other policy options still available to us.  These options require new thinking, new ways of leveraging information’s non-rival properties, of creating human capital, and of harmonizing short and long term and private and social benefits.

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