The ETS review committee has published its report [PDF here], and recommends that an all sectors, all gases emissions trading scheme should be the “primary economic mechanism” in the government’s response to climate change. However the report makes very little in the way of substantive recommendations about how the current ETS legislation should be amended. Agriculture should be included, and forestry given legislative certainty, but there’s no detail on how the current ETS timetable could be altered. The report’s main conclusions appear to echo climate change minister Nick Smith’s recent comments on the likely future course of climate policy — but effectively give him a free hand to do what he wants.
The majority report — supported by National and United Future — is accompanied by minority reports from Labour, the Greens, the Maori Party and ACT. Labour, the Greens and the Maori Party want tougher action, while ACT still denies the reality of climate change. The Maori Party and ACT would prefer a carbon tax to an ETS, but are otherwise on different planets. This leaves National trying to drum up support for amending legislation, but unable to rely on anyone other than Peter Dunne. Meanwhile, Labour is still offering an olive branch: they’ll support amending the current ETS, but not if it means huge taxpayer subsidies to big emitters or cripples forest planting.
Here are some of the report’s key findings:
The majority report recommends that the IPCC position should form the basis for government action on climate change. This is supported by all parties except ACT, who remain in denial (I’ll look at their position on “the science” in more detail in another post). NZ needs to act now, in order to send a “credible signal” to the international community that we’re doing our “fair share” — though the committee makes no attempt to quantify what that share might be.
The report suggests that there should be a “full and comprehensive regulatory impact analysis” before amending legislation is passed, but in the same breath recommends that legislation is required as soon as possible to give certainty to the forestry sector. It’s difficult to see how those two things might be reconciled and still see the government achieve its goal of finalising an ETS before the Copenhagen conference in December.
One key signal emerges from the report. Discussing how big emitters might be cushioned against the costs of introducing an ETS through the allocation of free emissions credits, the report includes this “key comment” (p62):
New Zealand National, United Future New Zealand, and the ACT New Zealand Party favour an intensity-based scheme without a cap. The New Zealand Labour Party, the MÄori Party, and the Green Party oppose this option.
Why the opposition? Because the committee’s own analysis suggests that intensity based allocation without a cap comes with big drawbacks — it can be more expensive than other options, give a weak signal to reduce emissions and even allow national emissions to increase. In other words, it provides the comfiest cushion for big emitters, who will benefit from big taxpayer subsidies and could even result in increased emissions.
There’s a lot more to mull over in the ETS Review report, and I will return to aspects of it in future posts. Meanwhile, No Right Turn provides a typically trenchant overview here, The Standard comments on the report and the Maori Party position, while David Farrar provides a National Party take here.
I’ll leave the last word to the Labour Party and the Greens. Labour made this comment in their minority report:
The Labour Party regards the select committee process as a massive waste of public time and resources. We endorse the process concerns expressed by the Green Party. We also observe that, despite having insisted on the setting up of the committee and contributing a lengthy minority report, the Act Party has not deigned to attend most of the committeeâ€™s meetings. It would have been far preferable for the Government to have tabled amending legislation to the existing law for the committee to consider.
Those process concerns?
The committee spent many weeks hearing submissions but without discussing the issues they raised, let alone forming a collective view on them. Then we did not meet for some weeks while advisers completed reports. We were mostly limited to two hours of meeting time a week. As a result consideration of the many issues raised by submitters was compressed into a few short meetings. In fact when we began our final meeting, at which we deliberated, more than half of the draft report had still not been discussed by the committee, and neither had any of the proposed recommendations.
If that’s how parliament works, colour me unimpressed.