The big emitters’ carefully co-ordinated campaign against the proposed NZ Emissions Trading Scheme (ETS) is having a big week. Following on from last week’s Castalia report, the Greenhouse Policy Coalition and the Major Electricity Users Group are now claiming that a survey shows the ETS will have big economic impacts [Herald , NBR]:
The relatively small survey of 32 firms, which includes some meat companies, pulp and paper mills, iron, steel, shipping, cement, dairy, mining and supermarkets shows that a carbon price of $30/tonne will cost those firms $241 million in increased direct energy costs, result in deferred investment of $1.5 billion, put at risk over 2000 existing jobs and 425 new jobs had planned investment gone ahead.
The survey cunningly ignores the government’s proposal to grandfather emissions in most sectors, presumably so that it could paint the worst possible picture of economic impacts.
Forgive me if I consider that a survey conducted by a lobby group, based on a tiny response and dubious methodology, that just happens to show exactly what the lobby group wants it show, is meaningless. But from the GPC’s perspective, any noise is presumably good noise. Which is about all that can be said for a column by Alasdair Thompson of the Employers and Manufacturers Association in the Herald. Fodder for the spin machine. Even Westpac got in the act, claiming that a carbon price would put inflationary pressure on the Reserve Bank, on equally flimsy grounds. And by some strange coincidence, the Business Roundtable just happens to have shipped notorious British sceptic Nigel Lawson over from the UK to sing for his supper on Thursday. No guesses about the tune Nigel will bellow… (I’ll be posting about Lawson later this week). Fortunately, Rod Oram’s around to demonstrate (in his Sunday Star Times column at the weekend) that there are plenty of businesses who don’t need a weatherman (or climate scientist) to know which way the wind is blowing.
All this PR activity is about framing the debate. If the big emitters can ignore the climate imperative and international consequences of our actions and spin this as about economics and prosperity and jobs, they presumably hope to be able to get the scheme watered down or delayed. Tactically, it may be about trying to separate National from its early acceptance of the ETS proposals. Can Key and Smith resist the siren call of corporates with deep pockets?
In the final chapter of Hot Topic, I refer to the concept of global overshoot: the idea that human activities are exceeding the planet’s ability to regenerate resources. It’s the ultimate meaning of sustainability – living within our planetary means. This year we started eating into our ecological overdraft on October 6th – three days ahead of last year, and the best part of month earlier than in 2000. The Global Footprint Network calculates Ecological Debt Day:
As humanityâ€™s consumption of resources increases, Ecological Debt Day creeps earlier on the calendar. According to current calculations, humanityâ€™s first Ecological Debt Day was December 19, 1987. By 1995 it had jumped back a month to 21 November. In 2007, with Ecological Debt on October 6, humanity’s Ecological Footprint is almost thirty per cent larger than the planetâ€™s productivity this year. In other words, it now takes more than one year and three months for the Earth to regenerate what we use in a single year.
Continue reading “Into ecological overdraft”
New York-based merchant bank Lehman Brothers have produced an excellent overview of the business and economics of climate change (PDF). If you have any interest in the economics of dealing with climate change, and want an informed overview of the drivers of political and commercial change, this is a very good place to start. I don’t agree with everything they have to say (they’re far too dismissive of electric vehicles, for instance – I reckon EVs have the potential be a disruptive technology), but the sectoral and country by country analysis of investment opportunities is fascinating, and their general take on the issue is very close to my own. From the conclusions:
The size of the carbon market globally, as measured by the value of permits issued, could, on a conservative estimate, be over $100bn by 2020 or thereabouts. This assumes that the United States, Japan, and China join the EU in moving to an emissions trading scheme covering around 50% of their total emissions. Annual turnover would be a multiple of that figure. This compares with the US Treasury market which currently stands around $2 trillion.
They put the chances of an international deal including China and India at 75% (up from 50% in an earlier report), and expect share prices to begin to track relative carbon intensity – with carbon-light companies doing better. Recommended reading.
A new report from Lincoln UniversityÂ´s Agribusiness and Economics Research Unit finds that New Zealand’s dairy industry has a smaller global warming footprint than the UK’s, even after taking into account the emissions resulting from shipping products half way round the world. From Lincoln’s press release:
The Lincoln studyÂ´s central finding is that the UK produces 35 percent more emissions per kilogram of milk solid than New Zealand and 31 percent more emissions per hectare than New Zealand – even including transportation from New Zealand to Britain and the carbon dioxide generated in that process.
The report’s lead author, professor Caroline Saunders, explains the importance of this finding:
â€œOur report clearly demonstrates the fallacy of using a simplistic concept like `food milesÂ´ as a basis for restrictive trade and marketing policies. It is obvious that production systems and not transport are the major contributor to the differences in greenhouse gas emissions and energy use.