In New Zealand we all know that agricultural emissions are the second biggest sector at 48%. We have a big beef and dairy sector, the latter having expanded into dry regions once irrigation became available. These areas are entirely unsuitable for dairy conversions.
Since the New Zealand government announced in October 2019 that it would not include farm emissions in the Emissions Trading Scheme just yet, I have been wondering how farmers will adapt during this initial trial period. The scheme aims to cut emissions by charging companies a price for each unit of greenhouse gas produced and farmers will be exempt till 2025 while they adapt. Under the scheme, farmers would be responsible for collecting data, reporting it, and paying directly for emissions. If the government doesn’t think they are moving fast enough they will legislate earlier.
People seem to think it is just their farm practices that will have to change. So is it just their farm practices or is it something else as well?
In a significant study by a 37 experts-strong EAT-Lancet commission called Food in the Anthropocene, published in The Lancet in January 2019, there is this astounding statement: “We estimated that changes in food production practices could reduce agricultural greenhouse-gas emissions in 2050 by about 10%, whereas increased consumption of plant-based diets could reduce emissions by up to 80%.” Well, it looks like experts from our agricultural colleges might quibble with that factor, but nonetheless the potential is huge. Even the 11,000 scientists who recently declared a climate emergency wanted us to eat less meat and dairy.
So while we may be the first country in the world to include agriculture in our emissions pricing scheme, the future is in the hands of farmers. The government wants methane emissions down 10% by 2025.
And of course it’s not just methane emissions that have to come down. According to Professor James Renwick (email 2 Nov 2019) “The key thing to do is limit CO2 concentrations as they decide the long-term change in climate. How important methane reductions are depends on what’s happening with CO2 concentrations.
Reducing methane emissions will buy us decreases in methane concentrations over just a few years, but it’s pretty much wasted effort if we continue to let CO2 continue to build up.”
The main agricultural greenhouse gases (GHG) are methane and nitrous oxide. Methane is produced in the rumen of the cows by certain microbes and are naturally present in all ruminant animals. … Nitrous Oxide (N2O) is emitted from soil when urine, faeces and fertilisers are broken down by microbes in the soil.
The EAT-Lancet study, which had 357 references at the end, and was done by an international team of experts from health, agriculture, climate change and politics, puts methane as 56 times as powerful a greenhouse-gas as carbon dioxide over a 20 year period and nitrous oxide as 280 times as powerful. (It also recommended that protein be just 10% of the daily calories)
It’s fairly horrifying to find that over a period of 55 years (1961-2016) there has been a worldwide 89% increase in agricultural emissions (not CO2). That is methane and nitrous oxide mostly. But on that same climatewatchdata site, we have agricultural emissions being only 11.5% of total emissions. That, of all estimates, is the lowest, the highest being from the consultants that Worldwatch commissioned in 2009, at 51%. The FAO in 2006 estimated 18% and revised that down later to 14%. Goodland, one of the Worldwatch Institute’s consultants noted that by then FAO had ‘partnered with international meat, dairy and egg organisations so was no longer objective.’
Wise Response, an environmental organisation comprised mainly of academics, said in their submission on agricultural emissions, “While CO2 is the dominant greenhouse gas, keeping global warming less than 2°C or 1.5°C clearly requires control of all greenhouse gases and in particular of methane (CH4) that is the second most significant. As noted in a recent and very detailed comparison of different pathways consistent with the 1.5°C target, “early mitigation of CH4 emissions would significantly increase the feasibility of stabilising global warming below 1.5 °C, alongside having co-benefits for human and ecosystem health”.
They also state that because of New Zealand’s knowledge from agricultural universities to date, “In terms of dairy emissions reduction, anything up to 24% can be done without any drop in farm profitability (i.e. zero marginal cost of abatement). ”
The good thing about this is this. The Interim Climate Change Committee said, “Innovation in the agricultural sector has reduced its emissions intensity (emissions per unit product) by about 20% over the last 25 years. But overall agricultural emissions have increased 13.5% since 1990. The improvements farmers have made have helped keep agricultural emissions relatively stable since 2012”
While Wise Response referred briefly to the benefits of eating less meat and dairy, the sad thing is that as the Western world reduces its meat intake, the developing world is increasing. And that means China and India. Our exports are going increasingly to China and in fact China is New Zealand’s top market for red meat now. It’s just no good for global emissions for a few developed countries to reduce meat and dairy products because they have heard the health message and the environment message. China and all the other developing countries must stop their demand for animal products.
And that is something we can’t control. If we grew less beef and dairy, what would we replace our exports with? A tiny movement is detectable I believe which is reported on by Country Calendar on TVOne and by Country Life from RNZ of farmers experimenting with growing pumpkin seeds and hazelnuts as well.
For a while now I have been reading everything I can get hold of on Vitamin K2. A year or two ago I read Kate Rheaume-Bleue’s e-book “Vitamin K2 and the Calcium Paradox” and I have been hooked ever since. I am a big watcher of YouTube and recently ran across one presentation that stood out from all the others. It was from a microbiologist Dr Kiran Krishnan and it took about 47 minutes.
Dr Krishnan is the Chief Scientific Officer at the Microbiome Labs so he explains the microbiome can manufacture Vitamin K2 from Vitamin K1, given the right bacteria in the bowel. (probably those on a Whole Foods Plant Based Diet, especially younger people, have bodies perfectly capable of doing this conversion) Vitamin K2 is called menaquinone. Dr Krishnan has been studying Vitamin K2, particularly a form of Vitamin K2 called menaquinone MK7, for a decade. In the video he lists all the important functions that it performs in the body. And he says that “We are all subclinically deficient in Vitamin K2” because it is not common in our typical diet.
Contrast our typical Western diet with the diet of Eastern Japan where they eat nattō, a fermented soy bean. (Krishnan cites at least two studies showing high levels of nattō prevents osteoporosis.) You can source a list of natural sources of Vitamin K2 and Nattō is head and shoulders higher other foods, having 1000 mcg of MK7 per 100gm. The others foods are animal based and less than 10% of nattō in terms of Vitamin K2 content e.g. Gouda cheese (73mgm per 100 gm), chicken liver (14.1mgm), eggs (8mgm), butter 20.9mgm, chicken wings 25.3mgm and then there are the processed meat sources like sausages and salami. But these animal sources have it only in the various forms of MK4, the form that doesn’t stick around in the body long because it has a shorter half life.
People often dismiss the possibility of eating nattō because it is slimy and smelly and unfamiliar. In New Zealand it is available in Asian food stores but comes frozen from Japan. I didn’t find it offensive at all so I am now experimenting various ways to make it. I found that in our country it is almost impossible to source organic soy beans so I have to make it from black beans or chickpeas or mung beans.
Now what is this list of functions that Vitamin K2 performs in our bodies?
I won’t go over all his scientific sources, but I will list the diseases that can be avoided. Vitamin K2-MK7 plays a vital role in the following:
That is a long list! Because it activates a protein called osteocalcin, it helps deposit calcium in the bones where it should be. Because it activates a protein called Matrix Gla which loves binding with calcium, it removes calcium from arteries and other soft tissues. In other words it takes calcium and deposits it in the right place in our bodies – in our bones and teeth not our soft tissues. It can slow dow the progression of diabetes. He says it can revive dead or dying mitochondria , which are the power houses producing energy in our muscles. The muscle that has the highest number of mitochondria is your heart so that is why it can improve cardiac output. The improved cardiac output helps every cell get more nutrients and blood. It can revive dead and dying nerve cells.
Remember Vitamin K1 has been known about for a long time. It is available in leafy greens and is necessary for normal blood clotting. We have been taught that Vitamin K exists but few know that Vitamin K2 performs very different tasks from Vitamin K1. Many descriptions fail to differentiate between the two, and they are very different.
There are now a great many studies on Vitamin K2. Dr Krishnan’s group has been doing their research using supplementation with 320 micrograms a day, but many sources say an amount of 50 micrograms/day is enough to improve some health outcomes.
Official Guidelines for Australia and New Zealand
On our Ministry of Health’s website there is no Recommended Daily Intake for Vitamin K2 that I can find. In fact one would be forgiven when reading P147 of their 2006 document Nutrient References for Australia and New Zealand for thinking that only Vitamin K1 was important. It mentions menaquinones only as an offshoot of Vitamin K1 and even says, “The only important molecular form of vitamin K in plants is phylloquinone (vitamin K1) but bacteria can synthesise a family of compounds called menaquinones (vitamin K2).”
On Vitamin K2 it says in 2006, “The only important molecular form of vitamin K in plants is phylloquinone (vitamin K1) but bacteria can synthesise a family of compounds called menaquinones (vitamin K2). The biologic functions of vitamin K-dependent proteins produced in other tissues, notably osteocalcin and MGP are unclear…. Evidence of a possible association of suboptimal vitamin K deficiency with increased risk of adverse outcomes for bone health and bone fracture is under investigation by a number of groups but the outcomes have not been clear cut to date (Binkley & Suttie 1995, Binkley et al 2002, Braam et al 2003, Schaafsma et al 2000, Shearer 1997, Vermeer et al 1995).”.
The guidelines are being reviewed now, according to an email I received from a team member at the National Health and Medical Research Council (of Australia)on 22 October, 2019 .
You can take a supplement of Vitamin D3 and Vitamin K2 by pill, but having read Colin Campbells’s book Whole I prefer eating it in food. So I am ready to make my own nattō and experience the health benefits that the elderly Japanese do when eating it. I have followed a guy called Natto Dad on YouTube and he makes nattō from many sources. Here is one of his. However because I have small house I have bought myself a yoghurt maker and am making it that way. I read this piece from the fellow that is sending me my nattō starter.
And having written all this, I discover Dr Krishnan is actually in a commercial venture selling supplements, so I might have to take his research as having declarations of interest. I knew there was a Microbiome Institute and thought he was from this non-profit.
So I checked different sources. When doing a search for Vitamin K2 on Pubmed I found 3951 studies reported. There are 266 on osteoporosis and 100 on “vascular”, 102 on “calcification” and fewer on Altzheimers, dementia and diabetes. There was nothing where Krishnan was an author. It seems Krishnan publishes on researchgate.net because I found a lot of his articles there.
A review of the literature there summarised the case in 2015. “Vitamin K2 may be a useful adjunct for treatment of osteoporosis, along with Vitamin D and calcium, rivalling bi-phosphonate therapy without the toxicity”. They said the evidence was insufficient for diabetes, arthritis, renal calculi and cancer but it was promising.
So it is an important Vitamin in the body. Even if it just made sure the calcium you absorb from your food is going to the right place, it would significantly reduce your risk of osteoporosis and vascular disease. And that means heart disease and strokes. But it definitely looks as though it does more than prevent heart disease and fractures.
So it’s worth keeping an eye on the new dietary guidelines now that will be coming out of Australia for our use!
When I first perused this book I thought it might be boring, as he named each chapter with another version of reductionism. But I ended up reading it twice and taking notes.
T Colin Campbell is well known in the Whole Foods Plant Based eating community; in fact he invented the phrase in 1978 while he was on a cancer research grant review panel. He spent his life in nutrition research publishing 350 papers, most of which were peer reviewed and printed in prestigious scientific journals. He had 20 years of being on expert committees that evaluated and formulated national and international policies on food and health and determined which research should be funded.
I came away with a huge respect not only for the miraculous human body, but for a man who stepped outside the prevailing paradigm and stayed there. It wasn’t easy for someone from a dairy farm who went as a wide eyed scientist with the noble goal of ending childhood malnutrition in the Philippines to face the shocking fact that animal protein was the culprit in turning on cancer and that in this case it was the casein from milk. “I chose to follow this discovery everywhere it led me.”
When he submitted a paper saying that animal protein intake determined cancer development far more than the dose of chemical carcinogen, he had difficulty getting it published in Cancer Research. The reaction: “Colin, you’re talking about good food. Don’t take it away from us.” He had hit a sensitive nerve. He said, “Even rational, data-driven scientists could be sent into prolonged state of hysteria when presented with evidence that their favourite foods might be killing them.”
He is glad, and so should we be, that he doesn’t live in an era where heretics are burnt at the stake.
It was his research on an enzyme called MFO which converted him to wholism, because the scientific method itself had to be questioned. He says the battle between wholism and reductionism is unnecessary because there is no inherent conflict. “Wholism doesn’t oppose reductionism; rather it encompasses it.” He realised the enzyme doesn’t stand alone, it is an integral element of a larger system. When one part is altered, all the other parts are forced to adapt to try to keep the system running. “To reductionists nutrition is just the arithmetical sum of the individual parts”. An apple does a lot more inside out bodies than all the known apple nutrients ingested in pill form.
The various dogmas of our society include “calcium grows strong bones” and “Vitamin A is necessary for good eyesight.” It’s simply wrong to talk about a nutrient on its own as if it acted alone in a mechanical fashion. Nutrition is not a mathematical equation.
Campbell of course has huge respect for Dean Ornish, Caldwell Esselstyn, John McDougall, Neal Barnard and Alan Goldhamer who have done experiments comparing the effects of a diet high in animal protein with the effects of a WFPB diet. He describes Esselstyn’s results as “jaw-dropping, nothing comes close.”
Why doesn’t he say eat x gm of this nutrient and y gm of that?
That is reductionist. Firstly, the body knows how much to absorb of any mineral. Eat a carrot and the body can convert the beta-carotene in it to its most common metabolite, Vitamin A or into eight times as much Vitamin A. The body decides, according to what it needs. Our digestive processes are complex and unpredictable.
Secondly, foods vary. One peach may contain forty times more beta-carotene than another depending on the season and many other things. So we can have variation in foods as well as in nutrient absorption and utilisation.
Thirdly nutrients modify each other’s activities. Magnesium influences the effects of iron, manganese etc through the activities of hundreds of enzymes.
This explains how silly it is to megadose on nutrients isolated from whole foods.
The body has to keep every mineral and iron within a certain range, quite a narrow range in fact. Sodium has to be between 135-145 mol/L, magnesium 0.6 to 0.8 mol/L, chloride 340-370mg/dL etc And it does it without any thinking or directing from us!
So we don’t know the effects of a single agent on health because that’s not the way the body works.
His study of one enzyme was what converted him to wholism. He found that an enzyme called MFO could act either as a cancer fighting machine or as something that produced carcinogenic by-products. When we eat the right foods, MFO moves towards homeostasis. When we don’t it contributes to disease. And MFO is just one of the 100,000 or more enzymes that contribute to the function of the human body. “Nutrients don’t follow a single predictable pathway; rather after they enter the trillions of cells in our bodies.” They can branch out into multiple pathways of metabolites.
He is stunned by the brilliant ways our enzymes work using minimal energy and describes the system as “a symphony extraordinaire”.
So as a nutritional scientist he teaches us how complex and intelligent the body is.
When it comes to genetics and foods he says the foods we eat and the nutrition they provide is far more important in determining cancer than our genetic backgrounds. “When people migrate from one country to another they acquire the cancer rate of the country to which they move, despite the facts their genes remain the same.”
Then comes his astonishing statement. “At least 80-90 percent and probably closer to 97-98% of all cancers are related to diet and lifestyle, not to genes.” Digest that one if you will. The current common figure is about 30 percent.
No wonder he said he was not a popular figure in the cancer research community, one which is focussed on discovering the chemical carcinogens that cause cancer. He threatened jobs, careers and structure.
There are three sentences I learnt by heart. “We live in a world where carcinogenic mutations abound, many of them from natural sources like the sun, viruses and moulds. You can’t avoid these carcinogens or the mutations they produce. The more effective method of prevention is to address what determines whether or not these mutations progress into cancer: nutrition.”
This all fits perfectly with the first page of Dr William Li’s book Eat to Beat Disease.
Li is the co-founder of the Angiogenesis Foundation. Angiogenesis is the process our bodies use to grow and maintain blood vessels. He explains that in autopsy studies on individuals who had never been diagnosed with cancer, almost 40 percent of women between forty and fifty had microscopic tumours in their breasts and almost 100 percent of people over the age of seventy had microscopic cancers in the thyroid gland. “Up to ten thousand mistakes occur in the DNA of dividing cells in your body every day, making the formation of cancers not only common but inevitable. And yet these microscopic cancers are completely harmless.” He then goes on to say the body starves them of the blood and nutrients they need to grow and you can optimise this defence system through the foods you eat.
When it comes to supplementation the same logic applies – you can’t expect chemicals ripped from their natural context are as good or better than whole foods. But the natural health community has fallen prey to this ideology.
Dr Rui Hai Liu, a Chinese researcher found that 100 gm of fresh apple had an anti-oxidant Vitamin C-like activity equivalent to 1500 mg of Vitamin C. Yet that 100 gm when analysed had only 5.7mg of Vitamin C. The Vitamin C-like activity was 263 times as potent as the same amount of isolated Vitamin C. “Take a Vitamin C pill and we miss out on the cast of supporting characters that may give Vitamin C its potency – Vitamin K, Vitamin B6, copper, niacin, magnesium, potassium, dietary fibre, quercetin, catechin, phlorizin and cholorogenic acid. There are hundreds if not thousands of chemicals in apples each of which in turn may affect thousands of reactions and metabolic systems.”
He cites studies showing supplementation with Vitamin E being useless because it acts in conjunction with selenium, some amino acids and polyunsaturated fatty acids. On omega 3 he says 89 studies were summarised and concluded that omega 3 fats do not have a clear effect on total mortality. And a 15 year study with 200,000 people found it increased the risk of type 2 diabetes with a dose related response. A study on beta-carotene supplement had to be terminated early due to increased risk of death. But nutrients are great in food.
He claims we have reductionist social policy too. “We know that polluting rivers and streams is bad but polluting our own bodies is OK, as if what we eat has no impact on the rest of the environment…Our high consumption of animal based foods contributes to environmental problems like soil loss, groundwater contamination, deforestation, fossil fuel use and depletion of deep aquifers.”
The last section deals with understanding the system. As there is no money to be made for drug companies, the medical industry or the supplement industry by funding research on the benefits of eating plant based foods, the system is rigged to fund reductionist research for drugs. “You can’t patent a recommendation to eat lots of fruit, veggies, nuts and whole grains.” There’s a lot of money to be made in cancer treatment. “Most researchers in the field not only fail to acknowledge nutrition as a means to create and restore health but also refuse to even become curious about its possibilities.”
The majority of total health research, basic and applied, is funded by the pharmaceutical industries or by agencies beholden to it. The author is horrified that there is no institute or centre of the NIH devoted to nutrition. Even the word epigenetic implies that genetics is primary and nutrition is a subdiscipline of it or even irrelevant. His personal stories make sad reading e.g. JAMA didn’t ever publish a single letter that was written to the editor criticising a published study on the effect of four different diets on obesity in women, despite the fact that Dean Ornish’s diet had been misrepresented. He says the Atkins Foundation is the propaganda arm of a billion dollar business.
Reading of his series of disappointments with medical journals, print media and television, I can only applaud the current policy of the WFPB community to record their seminars on video and put them up on YouTube and Facebook. Thanks heavens for the internet.
He talks of industry lobbyists writing and editing legislation and regulations for grateful understaffed legislators and agency head. He has had bitter experiences with high ranking government decision makers who privately say his views on nutrition and health should be public policy, yet who will be punished by the political system if they do. The message to eat more veggies, drink fewer sodas and choose leaner cuts of meat is woefully inadequate and has no impact.
On RDIs (Recommended Daily Intake) they have long been biased on the high side to the point where they encourage the consumption of animal based foods. The calcium recommendation for US (1200 to 1300 mg/day) considerably exceeds the intake in countries that consume no dairy and less calcium (400-600mg/day) but experience a lower rate of osteoporosis. The RDI for Vit B2 or riboflavin is also high.
But the protein story is worse. “The RDI for protein has for decades been 10-11 percent of calories, which is already more than enough (the average amount consumed on a WFPB diet).” In 2002, the Food and Nutrition Board of the National Academy of Sciences (FNB) concluded, based on no credible evidence, that we can consume protein up to an astounding 35 percent of calories without health risk – a number three times the longstanding RDI! At the time of the report, the director of the FNB was a major dairy consultant, and six out of eleven members of a companion policy committee also had well-hidden dairy industry ties. Dairy groups even helped to fund the report itself.”
Regarding daily fat recommendations, he was on a National Academy of Health panel himself in 1982. Although they wanted to reduce the fat recommendations to 20% of calories, the panel worried about the political palatability of an honest dietary fat recommendation that would have doomed their report to oblivion. So they chose 30 percent, a figure that remained part of the public narrative for many years –and the Atkins enthusiasts loved it.
Discussing organisations and their influence, he focusses on the American Cancer Society, the MS Society and AND (Academy of Nutrition and Dietetics) and paints a grim picture when it comes to their recommendations or their funding of nutrition research. He says the junk food industry contributes to the ACS and it is cosy with cattle barons. AND serves dieticians, schools, hospitals, day-care centres, government agencies and the public, but donors include Coca Cola, the National Dairy Council, Kelloggs, Mars, Pepsi cola and the National Cattlemen’s Beef Association. AND controls the course content for dietitians.
In his final chapter he says our society believes so passionately in the health value of milk and meat that it is hard for us to conceive we might be wrong. His study of four specific nutrients led him to understand that any one of them could substantially change the activities of the other three and hence his awe of the complexity of nutrition. “The way our bodies create and maintain health is the result of millions of years of evolution – not just of the functional systems, or even the entire body, you of the body as a part of the food web and all of nature.” He concludes that enacting change from the top down doesn’t work. “Eat whole, plant based foods, with little or no added pit, salt or refined carbohydrates. The crucial shift will happen one person at a time.”
For a society to move forward and to be fair, improving democracy is not enough.
Yesterday I attended a talk by Max Rashbrooke in Wellington. He had put out a new book – Government for the Public Good published by Bridget Williams books and costing above average. The talk was good and the matters he raised in it were important and oh so well articulated. I loved hearing the stories of Citizen Assemblies in Ireland on abortion, Iceland on their constitution, and in Taiwan on Uber and how they worked so well that they solved potential clashes and resulted in legislation that stuck. All good. (Especially as in one case people started to respect politicians more after the long process).
He talked about general dissatisfaction with government, the research on the privatisation of prisons, on charter schools and the importance of teaching people to argue for government ownership (not “intervention” as this language implies the market has the right). He talked about the ‘level of taxes’, assuming of course that the main taxes are taxes on income.
Better methods of decision making are always interesting and important.
But where was the deep thinking on taxing land and other natural monopolies? Absent. This is a man who has written so well on inequality so I understand he believes that to have a functioning society we need only a narrow gap in wealth between the groups in society.
So on the train home I turned my attention to what he had missed.
To obtain social justice we need a concept of the commons and a mechanism to ensure the commons is shared. The big one is land. Not all people can have the exclusive rights to the same site at the same time. So we need to charge regular rent for monopolising the use of land sites and other parts of the commons or natural monopolies.
What we already do towards this goal, sometimes totally inadequately
Charge rates on land or property value which includes land. So minimal at the moment it should be in the second category. Each site is unique and a natural monopoly.
Charge taxi licences.
Charge yearly for registering our cars This is effectively a small road user charge.
Charge road user charges. Drivers of light diesel vehicles and heavy vehicles pay levies through road user charges. No doubt far too small as it by no means pays for road damage they cause.
Fishing licences for freshwater fishing, none needed for sea fishing.
Fisheries are a public resource and so sea fishing is regulated through selling fishing quotas. But not annual payments
Railways in New Zealand had mostly been owned and operated by the Government. Never meant to be profit making business. Privatisation in 1993 failed.
Broadcast licences for monopolising a certain bandwidth.
Royalties for gas and oil are charged.
What we are not charging for
Water use for irrigation no rent charged. Water rights are on a first come, first served basis and cost nothing.
Water use for water bottling. No charges yet.
Airports. Most big airports have shares held privately as well as some held by the local council. So rent should be charged proportionately. Private airports pay a tiny nominal rent to local government in the form of rates.
Banking. Since private banks have the monopoly of creating 98.5% of New Zealand’s money supply and money is part of the commons, they should pay a high rent for the privilege. (Their method of creating money as interest bearing debt should be regulated by government too)
Underground pipes and fibres. Chorus should be charged rent for the privilege of having a monopoly over using land for this purpose.
Satellite Orbit Rights
And then there are the rents not paid yet for the monopolising of soil, rivers, lakes, sea, biosphere for dumping waste. This includes all climate change issues and all pollution of waterways and soils.
There are two people I know who have done studies on these resource rents and how much they can raise. Karl Fitzgerald for Prosper Australia in The Total Resource Rents of Australia report finds monopoly rents are capable of replacing taxation at all levels of government.
Earlier Gary Flomenhoft while a lecturer at the Gund Institute in Vermont, got his students to work on a study to estimate the potential of resource rents on common assets for public revenue and put it together in a report.
In both these studies the potential revenue from land rent dwarfs all others.
Yes Max democracy is fine but you also need to democratise wealth. Democratising resource use, understanding that rent must be paid for use of the commons is a concept we all need to grasp. There is very little argument for taxing what is good, like work!
Although about a fifth of the South Island high country is owned by Government and leased out to runholders, this is changing. Since 1992 the Government has allowed the privatisation of leasehold land. Called “tenure review” it involves an unusual deal and the government loses. The runholders because of their input into the farm claim the improvements belong to them. They end up getting part of the farm for a song. No I am wrong – they sometimes make money on the deal by a strange mechanism. And then they flip it on, making millions in the process. The less valuable land is kept for conservation. There is something strange about the land valuation process.
So why on earth does the public purse lose? To retire the pastoral rights, the Crown paid runholders $36 million (or $656/hectare). That is ridiculous. It is all explained by Dr Brower in April 2107 here and the Environment Court at that stage made a case for stopping freeholding of land in the McKenzie Basin.
The picture above from Stuff shows this week’s protest by Greenpeace about a farm near Twizel where the farmer wants to run 15,000 cows. Many local farmers and even Fonterra joined Greenpeace in opposing this dairy conversion.
All the figures and stories are given in her post and she ends by saying “The best, easiest, and cheapest thing New Zealand could do for the land and water of the South Island is to stop high country tenure review. Better late than never.”
As Charlie Mitchell from Stuff points out, the best land stays in pastoral use and the deal is skewed towards the wrong side. “You might assume that ownership rights to valuable land would be worth more than occupation rights to less valuable land. But the Crown believes the opposite, so it has purposely lost money through these deals.”
More recently we saw the headline “Flipped. From zero to $17.5 million.” This involved a lakeside property on Lake Hawea. Previously under tenure review the farmer had been paid $2.2 million by the crown and had paid nothing in return. Then he onsold it for $17.5million. Flipped from zero to $17.5 million by Charlie Mitchell. An earlier article is one on McKenzie country
Of course after privatisation the owner can subdivide so by April 2017 what used to be about 120 leaseholds is nearly 4000 parcels of freehold land.
The Minister of Lands Hon Eugenie Sage has her work cut out to change this situation.
Of late the Opposition has been pointing out that business confidence is declining. NZIER had released a survey saying business confidence is at a seven year low. The Government has been quick to dismiss it as a political bias by business – as something they always opine when a Labour Government comes in. And the Asian stockmarkets are currently looking wobbly. RNZ’s long term economic commentator Patrick O’Meara talked of softer demands, slower growth, lower investment intentions. He talked of the looming US-China trade war has attributed that to the fact that on Saturday Trump’s tariffs on Chinese goods begin. It may also affect markets in Europe, Canada and Mexico.
The trend started well before Trump appeared.
But because of declining net energy, worrying trends happened decades before Trump’s tariffs kicked in. Let me explain declining net energy. Whereas in the mid 20th century if you spent one unit of energy to extract oil, you would get 100 units of energy back, nowadays because it takes more energy to extract fossil fuels from deep sea wells and from fracking, the energy left for the economy is progressively declining. Since net energy available is closely correlated with economic growth we would expect economic growth to decline. Moreover productivity will decline. Productivity is an economic measure of output per unit of input and input includes energy.
British investigative journalist Nafeez Ahmed has written a great article explaining the gradual decline of both economic growth and productivity in the UK economy. He concludes, “In other words, trying to keep the growth machine growing when the machine itself is running out of steam is precisely the problem — the challenge is to move into a new economic model entirely.”
He quotes from a piece of research for the government by Professor Tim Jackson giving graphs of declining economic growth and productivity. Jackson says, “In 1996, the trend rate of growth in the global GDP was 5.5%. By 2016 it was little more than 2.5%”. From 1971-2016 productivity growth dropped from over 3% to just 1%. We must have similar graphs in New Zealand.
Economist Michael Reddell says on his website “Over the last five years there has been only about 1.5 per cent productivity growth in total.”
Ahmed himself is well ahead of others in the way he puts together and explains the connection between many serious global issues –fossil fuel depletion, climate change, finance, geopolitics, terrorism, food security, political instability.
Trump is just a symptom
Ahmed wrote on Inauguration Day 2017 that “Trump is not the problem. Trump is merely one symptom of a deeper systemic crisis. His emergence signals a fundamental and accelerating shift within a global geopolitical and domestic American political order which is breaking down.” He talked of the elephant in the room being the global net energy decline that drives all this.
Less than a month later he penned a chilling analysis of Trump’s regime. Half of them are now gone, having resigned or been fired by Trump. He grouped them under five headings – money monsters, fossil fuel freaks, black ops brigade, Ku Klux Klan and the guru gang – saying that was the perfect combination required to keep the old model working. Business as Usual must proceed. Drill baby drill. Increase funding for the military. If things look bad financially try riskier and riskier financial instruments.
Never before has there been such an environmental crisis where our emissions are making our habitat more and more inhospitable with floods, fires, droughts and the accompanying food insecurity. Never before have we seen governments like ours desperate to solve child poverty throwing money at them. We have even got a superannuitants winter energy payment. Yet homelessness and poverty continue.
The tragedy is that while the current government has its heart in the right place – to end poverty and preserve our environment – it is hamstrung. It is damned if it does and damned if it doesn’t. Political instability is becoming inevitable. Will New Zealanders after the hope of Jacinda Ardern be doomed to see in a Trump like government within five years? Nigel Farage is coming to our country soon. If we don’t find a new economic model that is not dependent on growth, we will come nowhere near a just, sustainable economy. That is the tragedy.
Anthony is a homeless guy who sits near Countdown in Waikanae and often sleeps in the Akatarawas in his tent.
His situation is dire — he has no home, he says, which means his benefit from WINZ has been cut off.
So is the gap between the landed and the landless really getting to this sorry state?
Fewer homeowners, but some own much more.
There are now fewer homeowners as a percentage of the population. But more people own more than one home.
The authors of A Stocktake of New Zealand’s Housing wrote in Feb 2018, “Home ownership rates have fallen to a 60-year low and could fall further.
“These falls have been alongside rapid house price inflation in many parts of New Zealand and, with this, deteriorating affordability. We are quickly becoming a society divided by the ownership of housing and its related wealth and recent housing and tax policy settings appear to have exacerbated this division.”
Successive governments have turned down official recommendations for land and capital gains taxes.”
Monopolists should pay rentals
So what is Anthony really owed by society? If we believe all land belongs to everybody, then anyone who monopolises a piece of land should pay a rental to society. This should be divided up amongst central and local government and individuals.
‘Landowners’ exclude everyone else from benefitting from their piece of land whether it be in Queenstown, Mt Victoria or Masterton. Currently land owners pay only one sort of tax for their land – rates. A typical rates bill would come nowhere near the 5% of the land value. It is more like 1-2%.
When I ‘own’ a piece of land in Mt Eden and the government and local government pay for infrastructure around me. This puts up the value of my land.
Over time my property may go up by $1million. All the rise has been in land value. If I sell my property I get unearned capital gain that rightly belongs to people like Anthony and to governments.
The annual rise in the value of the housing stock between 2012 and 2017 averaged $100 billion. With half going to government, this leaves $50b distributed to 4.4 million New Zealanders. Or $11,300 a year for everyone. This is just from the land rents. This is Anthony’s fundamental right. Just by being alive he should get his share in the land rents. He shouldn’t have to beg at WINZ.
Add the rents from minerals, fish, trees, power stations, electromagnetic spectrum and when all added together it should make a respectable basic income.
The only qualification for getting it is being born!
I was surprised when I played it today how animated I sounded. Now I need to finish promoting this book and get on with writing the next one, probably entitled Emergency with a subtitle about the need to have a climate currency and how it could be applied.
This is the trailer for the video record of the Living Economies Expo, from April 2017. Individual recordings of most of the talks will be through the post-production process soon, so those who were unable to attend can still receive the content.