Category: Climate politics

Rudd brooks no denial

Rudd Somehow Kevin Rudd’s climate change speech to the Lowry Institute earlier this month escaped my detection systems and it took Joseph Romm’s Climate Progress post today to draw it to my attention. New Zealanders, whose political leaders avoid big statements on the issue, can welcome its unequivocal tone. There seems an air of unreality to me in the emphasis our government places on catching up with Australia economically, with never a mention of the environmental challenges faced by that country.  But Rudd meets them full on:

As one of the hottest and driest continents on earth, Australia’s environment and economy will be among the hardest and fastest hit by climate change if we do not act now. The scientific evidence from the CSIRO and other expert bodies have outlined the implications for Australia, in the absence of national and global action on climate change:

  • Temperatures in Australia rising by around five degrees by the end of the century.
  • By 2070, up to 40 per cent more drought months are projected in eastern Australia and up to 80 per cent more in south-western Australia.
  • A fall in irrigated agricultural production in the Murray Darling Basin of over 90 per cent by 2100.
  • Storm surges and rising sea levels – putting at risk over 700,000 homes and businesses around our coastlines, with insurance companies warning that preliminary estimates of the value of property in Australia exposed to the risk of land being inundated or eroded by rising sea levels range from $50 billion to $150 billion.
  • Our Gross National Product dropping by nearly two and a half per cent through the course of this century from the devastation climate change would wreak on our infrastructure alone.

Continue reading “Rudd brooks no denial”

Rage against the machine

Before I begin the onerous task of catching up with the posts left undone by a fortnight of tourism and hospitality (old friends, in NZ), I’d like to draw your attention to a most interesting piece by Naomi (No Logo) Klein in the current Rolling Stone. Titled Climate Rage, it’s a thorough examination of the issue of climate debt — the need to recognise two things in any climate deal: that the developed world got rich by using up and exceeding the atmosphere’s “headroom” for greenhouse gases, and that the ones who suffer first and most severely will be the developing world, who played no part in creating the problem.

“If we are to curb emissions in the next decade, we need a massive mobilization larger than any in history,” [Angelica] Navarro [climate negotiator for Bolivia] declared at the end of her talk. “We need a Marshall Plan for the Earth. This plan must mobilize financing and technology transfer on scales never seen before. It must get technology onto the ground in every country to ensure we reduce emissions while raising people’s quality of life. We have only a decade.”

Klein reviews the calls for climate equity coming from the developing world, and the inadequacy of the responses currently on offer. She highlights the frustration felt:

The developing world has always had plenty of reasons to be pissed off with their northern neighbors, with our tendency to overthrow their governments, invade their countries and pillage their natural resources. But never before has there been an issue so politically inflammatory as the refusal of people living in the rich world to make even small sacrifices to avert a potential climate catastrophe. In Bangladesh, the Maldives, Bolivia, the Arctic, our climate pollution is directly responsible for destroying entire ways of life — yet we keep doing it.

If you read nothing else today, read this.

As you sow… (aka the “bugger” moment)

And so it begins: the rest of the world is starting to notice the major disconnect between New Zealand’s much advertised “clean and green” image and the National-led government’s piecemeal demolition of sensible climate policy. In yesterday’s Guardian, one of Britain’s leading quality newspapers, Fred Pearce devotes his “greenwash” column to New Zealand:

…my prize for the most shameless two fingers to the global community goes to New Zealand, a country that sells itself round the world as “clean and green. […] To rub our noses in it, last year New Zealand signed up to the UN’s Climate Neutral Network, a list of nations that are “laying out strategies to become carbon neutral”. But if you read the small print of what New Zealand has actually promised, it is a measly 50% in emissions by 2050 – something even the US can trump.

Pearce fails to draw the distinction between the policies of the last government — which were for carbon neutrality — and the stance of the current government — which has stopped all work on plans for carbon neutrality — but is spot on about the marketing problem NZ now faces:

Check the UNEP website and you will find an excruciating hagiography about a “climate neutral journey to Middle Earth”, in which everything from the local wines to air conditioning and Air New Zealand get the greenwash treatment.

After extolling the country’s green credentials, it asks: “Have you landed in a dreamland?” Well, UNEP’s reporter certainly has. He cheers New Zealand’s “global leadership in tackling climate change”, when the country’s minister in charge of climate negotiations, Tim Groser, has been busy reassuring his compatriots that “we would not try to be ‘leaders’ in climate change.”

This is not just political spin. It is also commercial greenwash. New Zealand trades on its greenness to promote its two big industries: tourism and dairy exports.

And there’s the crunch. Pearce goes on to point to research that suggests tourism would be badly hit by a loss of the clean green image. To make matters worse, environmental tourism is one of the fastest growing sectors of the market. Our agricultural exports also depend on that image — but Tim Groser and the audience of farmers he was addressing seem to have been blissfully unaware of the pit they were digging for themselves.

It takes years to build a good image and establish what marketing people call positive brand attributes, but it can take only a few newspaper articles to damage or destroy it. Tourism NZ’s British campaign just took a major blow. How long before the news spreads, tourist numbers fall and exports are hit? Will our Minister of Tourism rush to defend our brand? And just how are you going to do that, John? It’s your systematic demolition of sensible climate policies that is doing the damage.

[See also: Bernard Hickey this morning.]

[Hat tip: Sam Tobin]

National’s ETS: the kids can pay

The report released today by the Sustainability Council on the Bill to amend the Emissions Trading Scheme hits hard, and rightly so. It’s straightforward reading over 20 pages if you have the time, but I’ll pull out some of its main points here:

Originally the design of the ETS was to face polluters with the full cost of the nation’s Kyoto Protocol obligations. As legislated in 2008 it was watered down to go half way, but the proposed changes all but abandon the concept. The changes rank as one of the biggest economic reforms since GST was introduced 20 years ago. They promise in excess of $60 billion in new subsidy payments and a major reallocation of responsibility in terms of who pays the Kyoto liability. There has not been authoritative analysis of the costs to the nation in the public domain, yet Parliament has completed hearing submissions and there is less than a month before the government plans to pass the Bill.

The official accounts are giving a misleading impression of New Zealand’s emissions so far, by treating the 85 megatonnes (Mt) of credits generated by temporarily sinking carbon in new forests as if they carry no future liabilities when the forests are chopped down. That is how a 22% excess over 1990 emission levels has been turned into a 4% credit. This far understates the urgent need to reduce emissions. However, the Treasury recently advised that it will be necessary to recognise a “contingent liability” on the Government’s books to account for the forestry credits. This would show the cost to a future generation of not making today’s emitters pay today’s emissions bill. The Kyoto accounts need to be updated urgently to include this correction and inform consideration of the Bill before Parliament.

The emission reductions expected from the 2008 ETS legislation during the commitment period from 2008 to 2012 (CP1) were a mere 1.5% down from projected gross emissions under business as usual. The amended legislation reduces this to about 0.7% of gross emissions. We haven’t entered into any commitment for the period after 2012 but the report comments that any target in line with the commitments proposed by other developed nations will open up a huge gap to be filled with emission reductions and/or purchases of carbon credits.

Who pays? Here’s what the report says:

90% of the costs resulting from the ETS during CP1 are paid by those responsible for only 30% of total emissions. The costs, including higher charges for renewable electricity, dominantly fall on the small guys – households and small-medium businesses. This general picture changes only slowly after 2012 due to the very long phase out period for subsidies.

Households (including private road users) would bear half the total costs resulting from the proposed 2009 ETS (52%), while accounting for just a fifth of all emissions (19%).
Small-medium industry, commerce and services, and transport operators, account for 11% of emissions and face 38% of the costs under the 2009 ETS.
Combined, these sectors account for 30% of emissions but would carry 90% of the total costs.

On the other side of the divide:

Large industrials that account for 15% of emissions would pay just 1% of costs under the 2009 ETS.
Agriculture, with 49% of emissions would pay only 3% of the 2009 ETS costs.

The subsidies are large. If the nation as a whole must meet the charges for the 76 megatonne Kyoto liability, at the current price for credits of $30/t this would be a cost of about $2.3 billion. On this basis pastoral farmers would gain a $1.1 billion subsidy. Large Industrial Producers would gain a $488 million subsidy, much of it delivered as “compensation for higher electricity prices”, a form of corporate welfare the report notes is not available to other electricity users.

After accounting for all subsidies and compensation liabilities, the amended ETS could not reduce the Kyoto liability of 76 Mt by more than 16% (12/76 Mt) during the Kyoto period. 84% or more of the Kyoto liability would be transferred to future taxpayers unless current taxes are raised to fund this. On current plans, those in the 2020s will pay – making it a massive intergenerational wealth transfer.

The report asks when the Kyoto accounts will be changed to reflect the reality that in the long term the forestry sector is essentially a zero sum game. As recently as June Treasury estimated NZ being 9.6 Mt ahead of its Kyoto target and valued this “position” as a credit to the nation worth $207 million (based on a carbon price of NZ$21.61/t). The next update will need to change to reflect the real position. By July Treasury was offering new analysis to ministers, quoted in the report:

Treasury considers that it will be necessary to recognise a contingent liability on the Government’s books, associated with the forestry credits that will be used to meet the countries [sic] international commitments between 2008-2020. … At a price of $100/unit, this contingent liability could be as much as $18 billion for the period 2008-2020.

An appendix to the report carries an extended discussion on forestry and regrets the uncertainty and potential retrospective taxation facing the forestry sector which holds the real key to balancing the country’s future carbon budgets.

The report concludes with a consideration of the full eighty-year transition period from 2010 to 2089, and concludes that the proposed changes would deliver subsidies to agriculture and large industries with a nominal value of about $100 billion at $50/t, and $200 billion at $100/t. Two thirds of this would be paid to pastoral farmers and one third to major industries. If the subsidies are later wound back, it is likely these groups will attempt to secure compensation, unless the law clearly precludes this. In support of this possibility the report notes that:

some major emitters and Federated Farmers have already signalled that they view carbon charges as an attack on their claimed property rights – as though they had ownership to, or rights to perpetual use of, the atmosphere’s limited ability to absorb pollutants (by virtue of past use). They further claim that measures infringing their claimed rights are “takings” and require compensation.

It’s at the end of the appendix on forestry that the report delivers its overall verdict:

The ETS has not been designed to promote economically-efficient abatement. It has been designed to protect and promote the position of vested interests that are unwilling to shoulder the asset write-downs required to recognise a price on carbon, and to transfer the costs of this to future generations.

10:10 on its way to NZ

The 10:10 emissions reduction campaign launched in the UK earlier this year is likely to arrive in New Zealand soon — perhaps before the end of the year. Speaking on Chris Laidlaw’s RNZ Sunday Morning show [mp3], organiser Daniel Vockins confirmed that discussions were underway with interested parties(*) in NZ, and promised that if 1,000 New Zealanders signed up at 1010global.org, they’d launch before Christmas. 10:10 is the brainchild of Age Of Stupid producer Franny Armstrong. Individuals and companies make personal commitments to reduce their carbon emissions by 10% in 2010 — giving them something practical to do while the world haggles over longer term and larger targets for cuts. In the NZ context, a 10:10 campaign is expected to work well alongside existing efforts such as Greenpeace’s 40 by 20 Sign On campaign, and 350.org’s longer range commitment, but will send a very direct message to a government seemingly locked in to unambitious targets. If John Key won’t go to Copenhagen, will he sign up to 10:10? Britain’s Conservative leader David Cameron and his entire front bench already have.

(*) Including me…