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.