Cloud nine

NZETS.jpg National’s new energy policy [PDF], released yesterday, includes a promise that it will “introduce an emissions trading scheme within nine months of taking office that balances our environmental responsibilities with our economic opportunities.” Other highlights of the policy document include lifting the government’s moratorium on development of baseload thermal power generation (preferring gas over coal) but accepting the goal of 90% renewable generation by 2025, more seed money for oil and gas exploration, reform of the RMA, and a $1,000 grant for domestic solar hot water installations. Also released yesterday: the government’s proposed National Policy Statement on Renewable Energy Generation, designed to smooth the consent process for new renewable schemes. As you might expect, No Right Turn and Frogblog (one, two) are unimpressed, while David Farrar seems to think more hydro’s the answer (though his commenters are rabidly pro-nuclear).

There’s been plenty of attention paid to the end of thermal moratorium, but I’m particularly interested in how National plans to get a revised ETS ready within nine months of forming the next government. In the absence of any legislation before the election – which is looking more and more likely – the announcement suggests that National will take the framework of the existing scheme, tinker with the details, and then reintroduce it to parliament. The “tinkering” is reasonably predictable. There will be some sort of cave-in to the big emitters on “economic” grounds. This could involve bigger allocations of free credits and a longer phase out period – and there will be some sort of attempt to make the scheme line up with Australia’s. Agriculture might even be able to push for its entry to the scheme to be delayed even longer, once again on “economic” grounds.

In the absence of an ETS before the election, it is clearly good news that National has publicly committed to introducing some form of trading scheme early in its first term. Any ETS is better than none – any carbon pricing is better than none. The bad news is that the whole economy is left in limbo in the interim. What advice does National have have for the forestry sector, who are – at least theoretically – already in an existing scheme? I hope that before the election National will provide more detail on its ETS plans. This is a hugely important piece of policy with wide-reaching effects, and the electorate deserves to know more – much more – about Key & Co’s plans before deciding whether to support them.

6 thoughts on “Cloud nine”

  1. “while David Farrar seems to think more hydro’s the answer (though his commenters are rabidly pro-nuclear).”

    Nonsense, they’ve clearly studied the options and concluded that nuclear is a logical choice to meet both our carbon emission targets and energy needs.
    It’s those suffering from nuclear paranoia that are rabid.

  2. If I thought the commenters at Kiwiblog had studied the issue, I’d be happier.

    If (and when) small nuclear designs become economic from an NZ perspective, then we should consider them. Until then, we can meet all our electricity needs from renewables at a cheaper price.

  3. And we get ‘helpful’ comment from one of the G.O.D.s

    “Building a new gas-fired station at Otahuhu meant household power prices would probably stabilise instead of continuing to rise rapidly.”

    Has Bryan not realised that fossil fuels set the power price and the price of gas (and power) seems to be heading pretty much one way.

    He also passes comment about the price of a gas plant cf wind – conveniently forgetting that the price of fuelling the plant will be double what its build cost was – that is if they can get the gas.

    I was talking to an energy analyst today who said he still doesn’t rate the chances of a gas build all that highly. No one will build one without an assured gas supply and throwing $25m at exploration may or may not help with that.

  4. I had a look at DPF’s re nukes.

    Waiting for small scale, pebble bed, thorium reactors seems to be the answer.


    Oh, and Owen McS is hanging out for fusion…..waiting….waiting (even longer this time)

    Meanwhile…let’s burn the lignite!

  5. ETS is a scam. None is needed and we should burn coal and gas to get productivity up with secure power supply and not rely on rain as much. We need to be in top half of OECD, ETS will send us out of it as we will be stupid enough to pay for emissions that don’t cool the world.

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