ETS report: wishy-washy and a waste of time

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 Māori 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 committee’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.

7 thoughts on “ETS report: wishy-washy and a waste of time”

  1. The Big Green politikal acceptance of Emissions Trading as any sort of step forward has got to be the worst thing that has ever happened to the Climate Change debate. The whole NZETS circus has been a complete waste of time and energy for anyone trying to get anywhere on Climate Change in this country and the big Green’s [First Greenpeace then the Green Party] legitimising of emissions trading as some sort of amendable way forward was and still is – a grossly irresponsible and misleading position that shows just how little faith they have in people’s ability to engage in this struggle.

    Greenpeace and the Greens should have told New Zealand the truth about this when the ETS was tabled in the first place – instead they chose to use it as some sort of lens with which they could expose which parties [fonterra etc] are getting preferential treatment / insulation from climate policy, which of course did need to be done – but what a stupid trade-off [excuse the pun]. Oh and the greens got some insulation scheme that can only be afforded by people who can afford to do it anyway. Both were horrible outmanouvered and took us all with them.

    Meanwhile – the entire Kyoto process is completely F*cked for the same free-market-fetish reasons. With friends like these eh?

    There’s no doubt that a global social movement with climate change as one of its central concerns is the only way to tackle human-induced climate change. But when the public looks to organisations that are up to their neck in compromise that they cant tell them the truth it makes this mammoth task even more difficult.

    Climate Camp Aotearoa – Emissions Trading & Alternatives down the bottom

    Carbon Trading – Solution or Obstacle – Larry Lohmann

    Emissions Trading Watchdog – Carbon Trade Watch

  2. Lets me honest – ETS is about changing and people don’t like change. Some of our big trading partners are moving – see the EU now starting to charge airlines for emissions. Straight forward and no discussion – if you want to fly into the EU you either reduce emissions or pay. Seems easy to transfer this to other goods and servics coming in as well!!
    I run a large forestry business and have been working with our clients all over NZ. For many hill country farmers ETS is the only hope left to save them. They have had 5 years of negative returns, have had to borrow money to live and with the credit “rules” now applying cannot afford a bad year. Unfortunately many of the rural servicing, processing compaies are heavily indebted as well – the current recipe is not producing a good cake. Interestingly the most positive people to ETS are the older farmers – they have been through the mincer and don’t want their sons and daughters doing it as well. Producing offset credits could be one of New Zealands biggest export industries. Think about it – we grow forests – all the capital is invested in NZ. We then get credits which are electronic and sell them in an electronic transaction. Tyranny of distance gone and we get soil protection, biodiversity, fauna improvement – makes NZ look very 100% pure – whoops tourism might benefit, water quality will improve and flooding costs decrease – what a cost!!. The biggest problem we have is in the top 3 inches. If we have a price cap it has to have a strict limited time (1 year) – a lot of the large energy companies I am dealing with think its a waste of time – just causes distortions. Timing – Ag is hard but need to do something – leave them at 2013 start and feather in over 30 years. Industry – it only makes up a small fraction of our emissions – start in 2011 and bring in as Aus does. Energy and Fuel – bring in July 2010. Fuel may go up 5 – 10 cents – big deal it moves more than this and we just carry on. Elecrtricity – they have the best options to change and become renewable. Higher prices do make us more efficient. Lets just do something and use it to rebrand ourselves as the current cake is looking a bit sick.

  3. It looks to me as though all of the above has everything to do with making it look like New Zealand is doing something on Climate Change and nothing to do with actually reducing emissions.

    Our big partners are moving steadily backward on Climate Change -look at the state of the EU US and Aussie ETS’s – they’re absolutely atrocious and have led to a stifling of real debate on the issue along with the loss of various pieces of actual climate change legislation such as the U.S. EPA’s ability to regulate GHGs from coal fired power stations.

    The UK has met its climate targets by doing nothing because of Kyotos trading loopholes which NZ are successfully widening right now.

    The notion that Producing offset credits could be one of New Zealands biggest export industries is just disgusting; all this means is that NZ will be producing credits to keep the wheels on filthy Climate Changing industries that should be shut down immediately. Carbon Credits are just permits to pollute.

    biodiversity & fauna improvement wont get any better as a result of further monoculture plantatuion forestry in NZ

    Fuel prices went up in the EU ETS as quick as the emissions – companies lobbied for higher allocations of credits than they actually were emitting and were handed out millions of $ worth of credits for free – win win for the polluters and lose lose for both the consumers left thinking something is being done and for the climate itself. the same will happen in NZ.

  4. True – forests don’t reduce emissions only soak them up. BUT it does start to soak up some while changes are made. It also sets a price that makes people want to change for economic reasons – if we are really serious set the price of carbon at a minimum of $100 – this will not see many big polluters do nothing for long – hit them in the pocket hard – when petrol is $3.00 litre plus people/industry will change and look for alternatives as they see the price rising forever. Many forests will end up being indigenous – not all pine by a long shot – the debit /credit rules make it attractive for native. It allows us to plant or regenerate land back to what it needs to be and keep people on the land. We find as rule for every 8 hectares of plantation you get 1 hectare of native automatically in gaps and gullies. As John McCain said in the last Presidential election – even if we end up greening a lot of land and climate change is wrong we still have a far better outcome for our children and grandchildren. The downside is pretty good.

  5. Thanks Logger – yea I agreee, native regeneration would be ideal. And if the price of carbon was set at $100 minimum we might see some changes by industry – unfortunately Emissions Trading is incredibly good at reducing public participation and handing control of all the important details of the policy over to the market, which of course is totally manipulated by the polluters themselves – so this wont actually ever happen. Theres no point in having a price on carbon that is so low that it just allows companies to buy cheap licences to pollute, which allows them to look like theyre doing something when theyre not.

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