Unsurprising but nevertheless dismaying news on Radio NZ this morning that the NZ draft energy strategy has been scarcely altered since submissions were called for and will soon be presented to Cabinet for adoption. Both Gareth and I posted on the draft strategy back in July, but it’s worth saying again that this energy strategy statement is highly irresponsible in its primary focus on fossil fuel development for New Zealand’s prosperity. It is bewildering that a government which says it is committed to fighting climate change should be preparing to stake much of the country’s economic development on the exploitation of natural resources which will contribute to climate change.The government reportedly received around 300 submissions on the draft policy. No doubt some of them were from big players applauding the abandonment of the previous policy strategy’s emphasis on sustainability. I made a submission as a citizen deeply concerned by the evidence of dangerous climate change. Submissions such as mine obviously carried no weight for the Minister. I’m not sure that he even understands why we are concerned. I’ve lifted a few paragraphs from my submission to use here as a means of reiterating that the strategy does not acknowledge the seriousness of the threat of climate change.
The first question I replied to was that which asked whether the proposed NZES effectively promotes and supports the appropriate development and use of energy resources:
“The draft strategy sets a priority for the development of fossil fuel resources which is not compatible with the realities of climate change. It looks forward to the full exploitation of our fossil fuel resources while at the same time welcoming the gradual development of renewable energy. Such a strategy may have made sense if the only threat we faced was the need to eventually have something to replace fossil fuel when all the supplies are exhausted. But the far greater threat is that long before we reach that point we will have set the planet on the path to runaway climate change by continuing to burn fossil fuels. It is astonishing that the strategy does not recognise this but blandly focuses on the assertion that only a small proportion of our mineral and petroleum resources have been tapped to date.
“The development of renewable resources should be its first and urgent priority. It should recognise that plans to survey and drill deep water petroleum resources are deeply questionable environmentally. It should look to the phasing out of coal-powered electricity generation and should acknowledge that unless carbon capture and storage technology develops to the point where it can be employed on a large scale there is no future for coal exploitation in New Zealand.”
In reply to a question asking for comment on the proposed goal:
“The goal speaks of environmentally-responsible development and efficient use of the country’s diverse energy resources. But the document then goes on to focus primary attention on fossil fuels. Evidently the term environmental responsibility is being used as a kind of greenwash. The contradiction between what is said about the environment and what is proposed in relation to fossil fuels is painful. A growing economy which depends on increased global warming is suicidal.”
There were detailed sections of the draft that I commented on, but the above paragraphs indicate sufficiently the wrong direction in which the draft strategy is headed. I concluded:
“The 2007 strategy did not need to be replaced. But if it was going to be one would have hoped it would be by something better. This document is much worse. I urge that it be rewritten to reflect the primary importance of clean energy in meeting the challenge of climate change and that it be much more specific about the measures that will be taken in that direction.”
Such urgings obviously count for very little in Gerry Brownlee’s thinking. Cabinet will no doubt adopt the strategy and the government will again congratulate itself on its wise balancing of the economy and the environment.
Good on you for your intelligent and logical submission Bryan. You are not the only one who was ignored…just for the record, you were one of nearly 4,000 Kiwis who made our feelings known – MED sent me the stats just after submissions closed and the 300 refers to “unique submissions” – there were another 3-and-a-half thousand who sent in format emails from Greenpeace and WWF. But apparently they don’t count. Either way it’s an irresponsible, ignorant and regressive “strategy”. Even the IEA says: “could do better”. http://www.iea.org/index_info.asp?id=1897
Hmmm, I don’t watch much TV, but I caught John Key making a speech a week or two back, where he said something along the lines of “This government accepts reality” (referring to the Christchurch earthquake)
Seems their idea of reality is rather flexible.
Bryan, Gareth, fellow readers,
Brownlee’s Energy Strategy only make any sense in one context: if they had released it a few days earlier on the morning as an April Fools Day joke!
I also did one of “the 300” individual submissions on the strategy. I called it the Daft Energy Strategy.
Hey, there’s another deadline for submissions closing soon at 5pm on Wednesday 5pm. The submissions are for the 2011 NZETS review.
It seems that the usual ENGOs (Greenpeace, CANA, 350.org.nz, Forest & BIrd and WWF) are not pushing this on their websites with ‘form email’ submissions. So its really up to “the 300” again. Possibly thats due to the restrictive terms of reference (science base is excluded) or the over-long 47-page issues paper.
I would say that the key things to submit on given a 48 hour or less timeframe, are these recommended changes to the NZ ETS.
* bring in agriculture ASAP.
* enforce a real cap on total annual emissions so it really is “cap-and-tradeâ€
* scrap the NZ emissions unit and just use the existing AAUs that represent NZ’s 1990 GHG emissions
* end all free allocation of emission units to emitters and auction all units
* ring-fence the allocation of forestry carbon removal units to within the forestry sector
Which you might recognise as a <a href="http://hot-topic.co.nz/people-talkin-2/#comment-25187"comment.
The address to email a quickly-prepared submission is: By email to etsreview2011@climatechange.govt.nz, ETS Review 2011 Consultation, Ministry for the Environment
PO Box 10362, Wellington 6143.
Cheers all.
“scrap the NZ emissions unit and just use the existing AAUs that represent NZ’s 1990 GHG emissions”
You’ve been reading too much Terry-Bertram. The review is for post Kyoto policy. Where will AAUs come from after Kyoto?
“ring-fence the allocation of forestry carbon removal units to within the forestry sector”
I don’t understand this. Can you please elaborate.
But Geoff Bertram is to climate change mitigation economics what James Hansen is to climate change science.
(comment brought to you by Insomnia and Bladder)
“Where will AAUs come from after Kyoto?”
I can shed some light on that question. I am a trustee of a forest carbon sink project.
We own some assigned amount units for the sink’s carbon sequestration for 2008 and 2009.
The legal basis for our project getting these units is not the Kyoto Protocol. The legalities are our 50-year permanent forest sink covenant approved by MAF under two pieces of domestic NZ law; the Forests (Permanent Forest Sink) Regulations 2007 and the Climate Change Response Act 2002.
So our emission units sit on the NZ Emissions Unit Register in the trusts name, like a property at the Lands and Deeds office. They have no expiry date. Irrespective of what international arrangement follows the Kyoto Protocol, more units will be issued to us annually and these the units will remain legally valid (with a market value) until the NZ law that establishes them is changed by Parliament (or Gerry Brownlee…but I digress).
The same applies to the EU ETS; the basis of carbon markets is domestic law enacted by sovereign states.
Sorry Mr February you don’t seem to quite understand the AAU concept.
When New Zealand signed the Kyoto Protocol the Government recieved an allocation of units. These units were based on our 1990 emissions times five for the five years in the commitment period 2008-2012. These units assigned to New Zealand are called Assigned Amount Units, or AAUs.
At the end of the Kyoto period New Zealand needs to surrender an amount of Kyoto units (AAUs, CERs, RMUs etc) equal to our Kyoto obligation. The Government will surrender any AAUs they have at this point.
The only units the Government has the power to create to give to your forestry investment is NZUs. So there would be no point and no ability for the Government to get rid of the NZU and use only AAUs.
I would also suggest you sell all your AAUs in the next 12 months.
_R2D2,
I am afraid it is you that does not fully understand either AAUs or implementation of multi-lateral treaties (international law) through domestic law of a sovereign state.
You state “When New Zealand signed the Kyoto Protocol the Government recieved an allocation of units”
This is incorrect in terms of both timing and your understanding of the process. I suggest you read http://en.wikipedia.org/wiki/Climate_change_in_New_Zealand#International_treaties .
NZ signed the Kyoto Protocol in 1998 and ratified it in 2002. The government did not receive any units (presumably you think the UN issued them?) in 1998 or 2002. I quote from Wikipedia “New Zealand’s responsibility target is expressed as an “assigned amount†of allowed emissions over the 2008-2012 commitment period. The allowed emissions are divided into tradeable Assigned amount units (AAUs) and each Annex I Party issues to itself Assigned amount units (denominated as 1 metric tonne of CO2 equivalent) up to its “assigned amount” under Annex B of the Kyoto Protocol. In December 2007, New Zealand’s 309,564,733 Assigned amount units were recorded in the NZ Emission Unit Register”
_R2D2, your second point was;
“The only units the Government has the power to create to give to your forestry investment is NZUs.”
As I explained, your statement is factually incorrect. Read up about the MAF Permanent Forest Sink Initiative “It offers landowners of permanent forests established after 1 January 1990 the opportunity to earn Kyoto Protocol compliant emission units (Assigned Amount Units or AAUs) for the carbon sequestered by their forests since 1 January 2008.” http://www.maf.govt.nz/forestry/funding-programmes/permanent-forest-sink-initiative.aspx
Trying to find semantics doesn’t prove your point. I said we received an allocation of units. You say technically NZ was given the power to create a specific amount of AAUs. I don’t see how this changes things. We can’t create more NZUs than 5 times our 1990 emissions, as you point out in your first post. The current ETS review is for post-2012 policy, why we would want to move to AAUs at this point makes no sense. It seems like a stupid point to get hung up on. What ever form the ETS has post-2012 it wont sit underneath Kyoto, so the name of the unit doesn’t matter.
Just because MAF grants you AAUs doesnt mean MAF has the power to create AAUs. The non-ETS forestry schemes, such as the PFSI, are currently under review and this review will stop the PFSI granting AAUs post 2012.
Look, R2D2, it’s not a big deal making a factual mistake about something as complex and contentious as carbon trading (ditto for AGW).
E.g. there’s a even a similar mistake on page 20 of Bertram and Terry, third para; “the UN has issued to the NZ Government a matching amount of Assigned Amount Units”. NOT correct. Thats just not how domestic law and international law relate to each other. The NZ Government has ‘issued’ itself the AAUs under domestic legislation, the Climate Change Response Act 2002. The CCRA was enacted to give legal effect to the Kyoto Protocol. Given it is such a complex and contentious subject, I make no apology for insisting on getting the facts right. I am afraid you have given me further opportunities to improve your knowledge.
You state; “At the end of the Kyoto period New Zealand needs to surrender an amount of Kyoto units (AAUs, CERs, RMUs etc) equal to our Kyoto obligation. The Government will surrender any AAUs they have at this point.”
Thats not factually correct. The Government will not surrender Kyoto units as part of compliance with Kyoto. Compliance with the Protocol is calculated in units. The NZ Emissions Unit Register must record enough (NZ owned) Kyoto units (1990 AAUs plus NZ-issued forest sink AAUs plus other Kyoto units [CERS etc]) to match NZ’s GHGs. See http://www.mfe.govt.nz/issues/climate/greenhouse-gas-emissions/net-position/index.html#mean If there is a deficit of units then the NZ Govt has to buy Kyoto units on the international market.
“We can’t create more NZUs than 5 times our 1990 emissions, as you point out in your first post.” Thats factually incorrect and its NOT what I said. The 309,564,733 (1990 GHGs x 5) AAUs were created and issued in 2007. The Government intends to create millions of NZUs in addition to these AAUs in order to give them free to carbon intensive trade exposed emitters. This allocation will not be fixed, it will be proportional to industry output.See http://www.mfe.govt.nz/publications/climate/emissions-trading-bulletin-12/index.html
“The only units the Government has the power to create to give to your forestry investment is NZUs.” Thats factually incorrect. “Just because MAF grants you AAUs doesnt mean MAF has the power to create AAUs.” R2D2, read that sentence back to yourself. It makes no sense. You are contradicting yourself. Read my comment of April 9, 2011 at 11:39 pm again. I know for a fact that that the NZ Govt, acting through MAF, has the legal power to create AAUs (in addition to the 309,564,733 1990 x 5 AAUs) for carbon sequestration under the the Forests (Permanent Forest Sink) Regulations 2007 and the Climate Change Response Act 2002. I have read the exact sections. I wrote the Trust’s application to join the PFSI. I wrote the Trust’s letter to MAF requesting the issuing of AAUs. I read their letter saying the AAUs have been credited to the Trusts NZEUR account.
“there would be no point and no ability for the Government to get rid of the NZU and use only AAUs.”
Not correct. The whole point of an ETS is that emitters surrender units back to Govt. So of course just the AAUs could be used. If the NZ ETS had a true all-sectors-no-exceptions-100% auctions design, the one fifth of the 309 million AAUs could be auctioned annually as virtually all of them would be surrendered by emitters back to Govt each year. And there would be a real cap on emissions (except for carbon sink AAUs) and a real price on GHGs.
“The non-ETS forestry schemes, such as the PFSI, are currently under review and this review will stop the PFSI granting AAUs post 2012.” Thats just pure speculation.
Anytime you need the facts, just let me know.
Sorry, “We can’t create more NZUs than 5 times our 1990 emissions” was a typo, should have said “more AAUs”. All the acronyms become confusing when trying to type fast.
“Just because MAF grants you AAUs doesnt mean MAF has the power to create AAUs.†R2D2, read that sentence back to yourself. It makes no sense. You are contradicting yourself. ”
Lets use an example, I have a dollar, I give it to my child for pocket money, does this mean i have the power to create dollars?
NZ can only create AAUs equal to 5 times the amount of 1990 emissions.
“The process for establishing a Party’s assigned amount is initiated by the Party’s submission of its initial report, which should provide information on the Party’s calculation of its assigned amount, its CPR, and other information necessary for the Party’s accounting of assigned amount during the commitment period.”
“After the initial report has been reviewed, and any questions of implementation have been resolved by the Compliance Committee, the Party’s initial assigned amount, together with other information related to the accounting of emissions and assigned amount, will be recorded in the secretariat’s CAD. Once the initial assigned amount is recorded, it is permanent for the commitment period and cannot be changed. ”
NZ must retire these units following the Kyoto commitment period (ie not keep re-issuing them).
“The Kyoto Protocol provides for a specific period of 100 days that is to occur after the completion of the review of the final annual report for the commitment period in order for Parties to continue making transactions for the purpose of ‘truing up’ any remaining differences between Parties’ total emissions during the commitment period and units retired for compliance”
“Before the end of the true-up period, each Party will be required to demonstrate that it meets its Article 3, paragraph 1, commitment. To do so, each Party must ‘retire’ a quantity of Kyoto units equal to or greater than its total Annex A emissions for the commitment period. The Party retires units by transferring them to a designated account in its national registry”
http://unfccc.int/resource/docs/publications/08_unfccc_kp_ref_manual.pdf
So not surrender to, but retire. Again, semantics, but it doesn’t change the fact that we need to move away from, not towards, the AAU post Kyoto. Case closed, lets move on.
Ok, next question; What does “ring-fence the allocation of forestry carbon removal units to within the forestry sector†mean?
Nick Smith says NZ is fine in terms of Kyoto Protocol obligations as NZ’s 23% growth in gross GHG emissions will be matched by NZ forestry being issued about 80 million carbon units for carbon sequestration. So one effect of our carbon sink project is that for every unit we are issued for carbon sequestration means one more tonne of GHG a NZ emitter may emit between 2008 and 2012, or one less unit NZ has to buy overseas to balance the “Kyoto carbon accounts”.
If forestry was “ringfenced”, then forestry carbon sink removal units could only be used by foresters to match their ETS obligation to surrender units to match deforestation emissions. So that would mean industry would have to work under a lower GHGs cap and pay a higher cost to obtain extra units to surrender to match their emissions.
It’s actually Jeanette Fitzsimon’s idea.
Lets think about this for a second.
Forest removal units not able to be used against a fossil fuel emitters obligation, leaving only foresters as a market to sell the units too.
Would this result in an incentive for net afforestation? As soon as area in forest started increasing wouldnt the price drop to zero?
It would put a ‘cap’ on deforestation so long as foresters didnt have access to the $25 price option I guess.
I want to clarify what seems like a confused conversation.
AAUs is an assigned amount unit under the Kyoto Protocol (KP). AAUs represent the permissible level of emissions allowed over the KP first commitment period 2008-2012 (CP1). They only exist within the KP framework. Without the KP AAUs do not have a future unless they are incorporated by domestic law or extended by some future international agreement.
The “Assigned Amount” for each countries permissable level of emissions during CP1 is fixed. It cannot be increased. So new forests do not create new AAUs.
Forests planted since 1990 under the KP are eligible to earn RMUs (removal units). These are totally new credits that are generated. This is essentially what post 89 forests in NZ are generating. The NZ government under the PFSI chose to award PFSI forests with AAUs not RMUs for a variety of quite technical reasons. The key point is that for everywhere AAU issued to a forest owner there is an equal new RMU being created and banked by NZ Govt for their Kyoto obligations.
So the long of the short is that new AAUs cannot be created….
Have a read of How is the Kyoto net position calculated?.