Brother, can you spare $3.10 for a tonne of carbon dioxide?

by Mr February on October 18, 2012

cup of coffee In which Mr February (aka Simon Johnson) looks at the uselessness of the report of the Finance and Expenditure Committee on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, people begging on Lambton Quay in Wellington, and the fact that the spot price for a tonne of carbon dioxide is the same as for a flat white.

Have you heard the old Tin Pan Alley song “Brother can you spare a dime?” The experience of poverty and the Depression in America summed up in a popular song. The lyrics were written by Yip Harburg, and the music by Jay Gorney in 1931. The version by Al Jolson is very well known, but I like this version by Charlie Palloy and his Orchestra.

I usually start most weekdays getting off a bus on Lambton Quay. From the bus stop I walk along to work looking forward to the first coffee of the day. I usually note how many people are begging. There are almost always a few people begging on Lambton Quay. Who says NZ is not in a depression? Not Paul Krugman. ‘Brother can you spare a dime’ is alive and well.

Except it’s sad cardboard signs saying ‘Homeless and need help’. Also it’s at least $3 to $4 for a coffee, not a dime. Not for a long time.

The other price that’s less than the cost of a flat white is the spot price of carbon dioxide in NZ. Carbon trader OMF reports spot prices each day at CommTrade Carbon. Guess what? The last trade of a New Zealand Unit (a tonne of carbon dioxide) was $3.10.

The declining price of the NZU

OMF also display a chart. It shows the collapse of the international carbon market reflected in our own plucky little battler NZ emissions trading scheme. Can any sane person look at this chart and reach any other conclusion than the NZ emissions trading scheme has completely failed?

OMF originally committed the chart sin of not starting the vertical (price) axis at $0. However, reality has intruded. As the New Zealand Unit (NZU) price has relentlessly approached $0, they keep having to move the bottom of their chart closer to zero. That would almost be a small bit of humour in a pretty sad story. If it wasn’t the empirical nail in the coffin of pricing greenhouse gas emissions via a NZ emissions trading scheme.

If the $3.10/tonne NZU price is the nail in the coffin, the death notice must be the report of the Finance and Expenditure Select Committee on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, released yesterday

This is the National Government’s bill to further weaken the NZ Emissions Trading Scheme. You know, indefinitely delay the entry of agriculture, make the half-price “two-for-one” transition discount permanent. If you can quickly recover your will to live after digesting 30 pages of bureaucratic and political policy denial and excuse-making, download and read the 117-page report.

Otherwise, just read Patrick Smellie’s analysis: “No restrictions on foreign-sourced carbon credits confirmed”

“The Climate Change Response (Emissions Trading and Other Matters) Bill was reported back to parliament by the finance and expenditure select committee with only technical amendments, and a decision that capping the use of foreign credits would compromise the emissions trading scheme principle of “least cost of compliance”.

The policy has seen major emitters such as oil and electricity companies snap up some of the lowest cost carbon units available on global markets, where prices have slumped to as little as $2 a tonne.

New Zealand Units, issued by the government, continue to be worth slightly more, at around $3 a tonne, but well below the $25 a tonne maximum price put on carbon when the ETS was introduced in 2009.”

Or just read the press release from Peter Hardstaff, Climate Change Programme Manager at WWF-New Zealand.

“This is another nail in the coffin for New Zealand’s credibility on climate change and suggests the government has no intention of trying to set this country’s emissions on a downward path. Other parties in the UN climate talks will rightly see New Zealand’s claims to be doing something to reduce emissions as all spin and no substance.”

What a complete shambles! Why didn’t we just have a no-exceptions carbon tax?

Brother can you spare a dime — Charlie Palloy and his Orchestra. Lyrics by Yip Harburg:

They used to tell me I was building a dream,

and so I followed the mob,

When there was earth to plow, or guns to bear,

I was always there right on the job.

They used to tell me I was building a dream,

with peace and glory ahead,
Why should I be standing in line, just waiting for bread?

Once I built a railroad, I made it run, made it race against time.
Once I built a railroad; now it’s done. Brother, can you spare a dime?
Once I built a tower, up to the sun, brick, and rivet, and lime;
Once I built a tower, now it’s done. Brother, can you spare a dime?

Once in khaki suits, gee we looked swell,
Full of that Yankee Doodly Dum,
Half a million boots went slogging through Hell,

And I was the kid with the drum!

Say, don’t you remember, they called me Al; it was Al all the time.
Why don’t you remember, I’m your pal? Buddy, can you spare a dime?

{ 10 comments… read them below or add one }

bill October 18, 2012 at 3:13 pm

By way of comparison, the first 3 months of Australia’s rather-more-expensive ‘flat-whites’ – $23 – has seen a 6.3% fall in emissions and the coal-industry is screaming. (As will their reactionary allies that haunt this page.)

So, not only has the Great Big New Tax failed to crash the world’s (newly) 12th largest economy, it seems to be working! Lots of egg on certain faces…

andyS October 18, 2012 at 3:32 pm

Oh just give it time Bill.
Enjoy the glory while it lasts.

Your economy will be joining the rest of the world on the scrapheap in due course

bill October 18, 2012 at 6:02 pm

Unlikely, certainly, but not impossible. But it won’t have been the Carbon Tax that caused it

Thomas October 18, 2012 at 9:10 pm

I guess your “Future Nein Danke” avatar is finally fitting your Memome.
(Memome = assembly of your memes dominating the expression of thought and opinions in your mind). Very suitable!

andyS October 18, 2012 at 9:15 pm

Whatever future you have in mind Thomas, it is not one I want to share.

bill October 19, 2012 at 12:24 am

I’m sure I speak for almost everyone else here when I say the feeling is entirely mutual, andy.

Doug October 19, 2012 at 8:21 am
password1 October 18, 2012 at 4:04 pm

I thought regulation making powers already existed in the Act to limit the amoutn and type of Kyoto units that could be surrendered. Just that those regulations haven’t been written yet. So not including such a cap in this amendment isn’t the ‘nail in the coffin’ at all.

Mr February October 18, 2012 at 10:04 pm

@Bill,
Thanks for that link. That really bears out the benefit of a real carbon price broadly applied. I am impressed that Aussie authorities are doing the right sort of monitoring and measuring to quantify declines in carbon-intense electricity generation. I have failed to find anything similar in NZ. I’d love to be proven wrong.

Mr February October 18, 2012 at 10:09 pm

@Password1,
One of the many regulation making powers is Section 30G of the Climate Change Response Act 2002.
Yes, in December 2011 Nick Smith and the Ministry for the Environment made changes (Reg 4 of the Climate Change (Unit Register) Amendment Regulations 2011) to regulations (Reg 8A Climate Change (Unit Register) Regulations 2008) to ban Certified Emission Reduction units (CERs) from industrial gas destruction projects (HFCs and N20) from use (suurender by emitters) in the NZETS.
Note that any NZ resident who had purchased/imported these CERS into the NZ Emissions Unit Register prior to 23/11/12, will still be able to surrender them for their GHG emissions until June 2013.

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