Oram on ETS debacle: Business Council for Sustainable Development ordered to shut up by big emitters; Nick Smith guilty of “breathtaking hypocrisy”

Fonterra and other big emitters have used their clout to silence the Business Council for Sustainable Development from commenting on National’s proposed changes to the emissions trading scheme, Rod Oram reveals in his Sunday Star Times column today.

…on November 5 Barry Harris, Fonterra’s head of milk supply and sustainability, delivered a withering speech to the council’s meeting. There were 31 other representatives of corporate members in attendance. Harris sharply criticised the council for what he considered its failure to represent the interests of members like Fonterra that “had a lot of skin in the game”.

The council’s insight into how opposed much of the public and some of business is to the ETS changes has clearly rattled some of its less sustainable members. According to some attendees, council chairman Bob Field, chairman of Toyota New Zealand, ordered council staff to stop making public statements on the ETS.

Perhaps Fonterra and Toyota believe that business can only be sustainable if it is protected from the costs of its polluting ways. The huge subsidies, of course, are their’s by right. Meanwhile, it remains to be seen if some of the less hypocritical members of the BCSD will make their voices heard.

In a coruscating column, Oram calls Nick Smith’s headlong rush in to bad legislation “breathtaking hypocrisy”, and quotes extensively from Smith’s comments a year ago when Labour’s ETS was being debated in Parliament.

Oram’s take on the current situation is right on the money:

National is making a dreadful mistake if it believes it can railroad through incompetent, damaging legislation hugely favouring heavy emitters.

At the next election, it will be easy for Labour and Greens to win support from the substantial number of voters who want an ETS that might actually cut emissions. Such an ETS would save the next government some $2 billion a year in subsidies to the heavy emitters, money voters would like spent instead on them and investment in new, clean technologies.

The whole column is worth a read. It’s Oram at his well-informed, combative best.

National’s nine ways to stuff up: Oram on climate policy in NZ

Rod Oram’s column in yesterday’s Sunday Star Times so perfectly captures my own feelings on the government’s proposed watering down of the emissions trading scheme that I asked Rod if he would allow me to post it here as a guest blog. I’m glad to say he agreed…

To understand how the government is destroying the Emissions Trading Scheme, it’s important to remind ourselves why we need an ETS in the first place.

Governments representing a majority of people on the planet believe climate change is happening. So they’re taking steps to reduce their nation’s emissions of greenhouse gases. Some have entered into international commitments to do so. Many more will do so in coming years.

In 1997, New Zealand committed to cut its emissions during 2008-12 to its 1990 levels. However, they are currently 24% above. So the National-led government has upped the ante with two new targets: a 10-20% reduction below 1990 levels by 2020 and a 50% reduction by 2050.

To achieve them, we need to invest heavily in new energy and carbon efficient technology for electricity generation and transport and processes in industry and agriculture. And we need to maximise the potential for our forests to act as profitable carbon sinks.

To do that we need to:

Continue reading “National’s nine ways to stuff up: Oram on climate policy in NZ”

Climate change policy myopia

This is a guest post by associate professor Ralph Chapman, senior researcher Andy Reisinger, professor Jonathan Boston and senior associate Judy Lawrence from Victoria University of Wellington. It’s a succinct explanation of how and why the government’s climate policy is wrong-headed and ineffective, and is required reading for anyone following the policy debate in NZ. It first appeared in the Dominion Post on Sept 18th.

The deal between National and the Maori party over the emission trading scheme raises serious questions about strategic policy making in New Zealand. The agreement has positive features – a price on carbon will apply from mid-2010 in some sectors – but it raises major concerns about the capacity of our democratic institutions to serve the common good of New Zealand and avoid capture by vested interests.

The deal rests on four myths about climate change policy.

Continue reading “Climate change policy myopia”

National snub to Labour on ETS: part 2 – the fallout

Carbon News has a special update tonight with the gory details of the government’s snub to the Labour opposition on negotiations to amend the emissions trading scheme. CN has also made available the full text of Labour’s proposed memorandum of understanding with the government (PDF) — which reveals that substantial incentives for agriculture were on the table. Commenting on the news of the deal with the Maori Party, a surprised Charles Chauvel told Carbon News:

“Negotiations with Nick Smith were … (pause) …I’m not sure now we had any discussions in good faith. We’d need to be very careful about whether or not we’d have any discussions with them at any time.”

Labour leader Phil Goff accused National of a “major breach of faith” over the handling of the negotiations, and Chauvel indicated that ETS policy was now likely to become a political football.

Under Labour’s proposed Memorandum of Understanding, Carbon News reports that the agriculture sector would have been given:

…free units for emissions reductions made by farmers before the sector entered the scheme on January 1, 2013. The offer would be worth hundreds of millions and encourage early emissions cuts by farmers who would then have free units to trade on the international market.

[Disclosure: registered users of Hot Topic can claim a discount on subscriptions to Carbon News.]

National snubs Labour, buys Maori support for watered-down ETS

Nick Smith announcedthis afternoon that National has cut a deal with the Maori Party to support an amended, watered-down emissions trading scheme. Key features (from the press release):

  • Revised entry dates of 1 July 2010 for transport, energy and industrial sectors and 1 January 2015 for agriculture
  • A transitional phase until 1 January 2013 with a 50% obligation and $25 fixed price option for the transport, energy and industrial sectors
  • A production-based industry average approach to allocations for trade exposed, emissions intensive businesses
  • A phase-out of industry support aligned with trading partners and the Government’s long-term -50 by 2050 emissions reduction target
  • Incentives for afforestation created by a domestic and international market for carbon credits
  • Enhanced transitional support for the fishing industry

Smith says that these changes will reduce the impact of fuel and electricity price rises to 3.5 cents per litre and 1 cent per kWh. In addition, the Maori Party get assurances that “further work will be done” on extending the energy efficiency assistance for low-income households, promoting new forestry planting, biodiversity protection, and provisions for treaty settlements affected by the deforestation provisions applying to pre-1990 forests. The government aslo released two background documents: a summary of the proposals and “Questions and Answers” about the changes.

A couple of thoughts spring to mind. The Maori Party’s support flies in the face of their minority report on the ETS Review, where they said they would prefer stronger action, not a weakening of the emissions cuts being considered. I suspect that the real meat of their deal lies in the treatment of pre-1990 forests, where many tribes have very significant assets.

It also looks as though Smith could not cut a deal with Labour, who would have objected to the price cap and reduced obligations during the new “transitional phase”, and the considerable softening of the long term phase out of free allocations to big emitters. Both of these moves have the effect of increasing the subsidy from taxpayers to big (often foreign-owned) corporates. At the same time, delaying agriculture’s entry into the scheme by two years may not do much to blunt objections from farmers if recent Federated Farmers pronouncements are anything to go by.

I’ll have more on this in due course, but here’s a revealing line from the Q+A document:

Assuming new afforestation of 50,000 hectares per year, New Zealand’s emissions in 2020 would decrease by approximately 20% relative to 1990 levels.

In other words, despite refusing to acknowledge forestry’s role in meeting targets during the “consultation” process, Smith has clearly known all along the role it would have to play — because he’s expecting it to deliver a big enough carbon sink to offset all of New Zealand’s emissions growth since 1990 and then 20% more. Words fail me — but only briefly, you may rest assured…