Who Knows How to Make a Carbon-Neutral Pencil?

Commentary, Environment, Owen McShane

Alert readers may have noticed an apparent contradiction in my last two columns on ‘carbon-footprints’.

The first column opened with:

“Government has floated a proposal that all buildings be assessed for their carbon footprint before issuing a building consent. This is yet another half-baked scheme which will make housing even less affordable without delivering any measurable benefit. No one knows how to measure such a footprint with any reliability, let alone over the 100 year lifetime of a building.”

Yet the next column referred to two calculations of carbon footprints as though they were well-founded “matters of fact”.

The first was the report “Consuming Australia” by Sydney University’s Australian Conservation Foundation, using data from the Centre for Integrated Sustainability Analysis. This study found that total transport activity accounts for only 10.5% of the carbon footprint of the average Australian family. This was the smallest slice of the carbon footprint “pie”. The report undermined ‘Smart Growth’ by finding that people in the outer suburbs had smaller carbon footprints than those living in central, intensified, “vibrant’ communities.

We can probably accept these findings if only because any organization with “conservation” and “integrated sustainability” on its letterhead would almost certainly have started out expecting to find the opposite.

Also, the authors of “Consuming Australia” analysed broad sectors of activity rather than a single product or process. They found transport accounted for only 10.5 % of the Australian family’s “carbon pie”. New Zealand’s private vehicle fleet accounts for only 8.5% of our fossil fuel consumption. The two findings support each other.

However, the second research findings were even more “heretical”. Chris Goodall, the U.K. Green Party Parliamentary candidate, declared that:

“Food production is now so energy-intensive that more carbon is emitted providing a person with enough calories to walk to the shops than a car would emit over the same distance.”

This was so heretical that the NBR sub-editors simply deleted this section from the first column, and when the second column led off with the same argument they “explained it away” by inserting material pointing out that the calorific content of beef was low and a vegetarian diet would deliver a lower carbon footprint than the driver. While I was definitely not boosting vegetarianism, I did expect many people would question Goodall’s research.

And they certainly did. The “Times Online” carries over 500 responses from critics and supporters of Goodall’s story from all round the world – including from New Zealand. Some criticized the choice of beef as the “calorie compensator”, others challenged the “system boundary”, asking whether Goodall counted the energy used to make the car. The cyclists also had their penny-farthings’ worth.

These two studies point up the apparent paradox of such “carbon footprint” analysis; the more “micro” the analysis, the more room for dispute, and the more self-evident our ignorance.
The Goodall study also suggests “carbon neutral” promotions, “carbon trading” schemes and “carbon offset” mitigations all carry a considerable burden of commercial risk.

For example, I recently watched a video promoting a NZ vineyard’s “carbon neutrality” as part of its marketing campaign in the UK. The video showed the many environmental ‘good works’ on the property, including extensive wetlands. As far as I could tell the methane from the wetlands was not included in the “carbon equation”. This may expose the company to challenge from any disgruntled competitor.

Every New Zealand business has to realize the whole concept of calculating carbon footprints is fundamentally flawed and open to challenge from any quarter.

In his classic essay “I, Pencil, my Family Tree as told to Leonard E. Read”, Leonard Read demonstrates that no single person knows how to make a pencil by listing its components (cedar, lacquer, graphite, ferrule, factice, pumice, wax, glue) and identifying the multitude of people involved, down to the coffee drinker in the forest and the lighthouse keeper guiding the shipment into port.

The pencil’s self analysis begins with:

“My family tree begins with what in fact is a tree, a cedar of straight grain that grows in Northern California and Oregon. Now contemplate all the saws and trucks and rope and the countless other gear used in harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into their fabrication: the mining of ore, the making of steel and its refinement into saws, axes, motors; the growing of hemp and bringing it through all the stages to heavy and strong rope; the logging camps with their beds and mess halls, the cookery and the raising of all the foods. Why, untold thousands of persons had a hand in every cup of coffee the loggers drink!”

F. A. Hayek drew on Read’s essay to illustrate his theory of “spontaneous order” and to explain how prices gather together huge amounts of dispersed information to guide our choices and actions. As the Pencil “says”:

“There is a fact still more astounding: the absence of a master-mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work.”

In Milton Freidman’s famous video “Free to Choose”, he summarized Read’s essay and went on to say:

“No one sitting in a central office gave orders to these thousands of people. No military police enforced the orders that were not given. These people live in many lands, speak different languages, practice different religions, may even hate one another—yet none of these differences prevented them from cooperating to produce a pencil.”

So, if no single person, or even a committee, knows how to make a pencil, how can we calculate its carbon footprint? How can anyone know the carbon footprints of the people who help make the pencil by mining graphite in Ceylon, or making candelilla wax in Mexico, or building the lighthouse that guides the ship into port?

Calculating the greenhouse gases emitted during the myriad processes that go into making the pencil adds yet another level of complexity and requires another round of knowledge – taking the exercise even further beyond the realms of possibility.

Two ironies follow.

The critics of Goodall’s thesis usually wanted to extend the boundary of his “carbon system” to capture more processes. But the more we extend the system boundary the greater our ignorance. The other irony is that given the ability of prices to capture so much information, a “best guess” on emissions is probably to pay the least. If new products are cheaper than recycled ones they probably burn less carbon.

The Pencil’s autobiography even reminds us that any application for a resource consent based on carbon-offsets is open to challenge in the environment court. Objectors simply have to extend the boundary to include the coffee-makers in Brazil. Any claim to carbon neutrality can be challenged on the grounds of false claims – again by simply extending the system boundary to include say the truck-builders of America or the ship-builders of Japan. We have used the process in reverse to challenge “food miles”.

Finally, how many bureaucrats would be needed to calculate the carbon footprint of every element of every building – including the pencil used to draw it?

We only get burdened with such nonsensical regulations because simplistic but élitist minds cannot believe that high levels of spontaneous order can operate without being directed by conscious plans created by their own ‘superior’ knowledge.

The autobiography of the pencil proves them wrong.

We need no further justification to restrain the power of the state and to retain our personal freedom to innovate, freely trade and generally organize our own affairs.