Introducing a decent carbon tax will reduce our overall spend on fuel

Here’s the latest chart of how we use energy in New Zealand. It’s from the excellent Energy in New Zealand 2015 publication from MBIE. As you can see, we are edging up toward 600 PetaJoules:

Click to zoom.

Transport, in purple, makes up 36% of our energy use – and that’s essentially all petrol and diesel.

What if we could halve that, losing 18% of our power requirements? We can. Shifting all that hydrocarbon burning from vehicles to large efficient power plants and then transmitting the resulting power as electricity to electric cars would halve the fuel needed for transport. Here’s a good explanation, using US examples.

In New Zealand we are grateful to have 80% of our electricity generated from renewable sources and so we can save even more fuel. We can also build more of the lower cost steady state geothermal plants rather than expensive per MWH gas-fired plants, saving even more. We can more quickly adopt the trend towards micro or distributed generation, which, along with the battery packs like the Tesla ones that Vector will market, will allow us to essentially charge our vehicles free of operational costs.

It’s an intriguing vision of the future, and it’s one that is going to happen given the forces of economics. For now the prices of fossil fuels are very low but over time the prices of solar and battery technology will become too low to ignore, and we can expect the prices of fossil fuels to be volatile, as they have always been. At the same stage the inherent advantages of electric cars – faster, quieter and safer, and a lot cheaper to operate – will become so obvious that we will all begin to switch.

New Zealand’s government is apparently chasing US companies to promote New Zealand as a test bed for autonomous vehicles. Perhaps we would be smarter to start by promoting New Zealand as the best place in the world for electric cars. And the easiest way to do that is by introducing a substantial carbon tax. As Gareth Morgan Foundation’s Geoff Simmons explains, even six major oil companies (and Z Energy seems to support this) demanded of the UN:

“We need governments across the world to provide us with clear, stable, long-term, ambitious policy frameworks. We believe that a price on carbon should be a key element of these frameworks. ”

And Geoff helpfully points out France’s “climate plan which will boost their carbon tax to €56 by 2020."