Tag: ETS

NZ’s climate policy omnishambles – gerry brownlee’s anti-carbon tax

Gerry Brownlee, formerly a minister of energy and fossil fuel, and currently the Minister for Transport and for bulldozing democracy, heritage and social order in Christchurch, today announced that petrol duty will be increasing by 3 cents a litre annually for the next 3 years to fund new roads.

Specifically mentioned are the Rangiriri and Tamahere-Cambridge sections of the Waikato Expressway, the Mackays to Peka Peka section of the Wellington Northern Corridor and the four-laning of the Groynes to Sawyers Arms (Johns Road) section of the Western Corridor in Christchurch.

The reason given for this policy is that the funding is needed for the Roads of National Significance programme and some upper North Island transport projects. I guess that means more spaghetti motorway in Auckland.

This is crazy policy.

The first level of craziness of the petrol duty hike is that it will affect the benefit-cost analysis (BCA) of each Roads of National Significance (RONS) project. Projects like Transmission Gully Expressway, have already been justified to hearings before the Environment Protection Authority on very marginal benefit/cost ratios. Julie-Anne Genter of the Greens said the benefit/cost ratio of Transmission Gully was 0.6. The RONS don’t even break even in BCA terms.

Now with the added petrol duty, the marginal benefit/cost ratio would be even worse. However, I bet that won’t make Gerry Brownlee or Steven Joyce any less obsessed with them.

The second level of craziness with the petrol duty increase is the Government’s complete failure to understand carbon pricing (which is what a petrol duty is) and to anchor their transport, energy and infrastructure policy with effective carbon pricing.

I have no problem with the price of petrol or diesel increasing. Road transport has many externalities that are not priced. It is “elephant in the room” obvious that the most important unpriced externality of liquid fossil fuels is global warming. And not a lack of four-lane expressways.

“But we have an emissions trading scheme!” I hear some one say. “Surely, road transport fuels are included in the NZETS?”

Yes we sort of have an emissions trading scheme which includes liquid fossil fuels which sort of prices carbon. But NZ carbon prices have crashed 72% in 2012.

According to estimates by the Energy and Data part of Steven Joyce’s mega-ministry MoBIE, in the three months ended on 30 September 2012, the NZ emissions trading scheme probably accounted for 0.93 cents out of the regular petrol price of $2.09 per litre.

So we may describe New Zealand’s petrol pricing policy as having two mutually conflicting parts. The price includes a component for revenue gathering for unneeded four-lane RONS expressways (3 cents/litre). The price also includes a component for the NZETS carbon price (0.93 cents/litre).

And the four-lane expressways part exceeds the carbon-pricing ETS part by a factor of 3.

This is the complete opposite of effective carbon pricing. Brownlees’s petrol duty, to coin an expression, is an anti-carbon tax. What a shambles!

The Doha Gateway: Look on my works, ye mighty, and despair

Where we are, where we should be and the consequences. Climate Action Tracker’s graphic on our future choices.

And so. Another set of climate talks done, this year dusted with Doha sand and labeled the “Doha Gateway”.  I’m not sure what they’re a gateway to,  certainly no immediate improvement to the climate. The final hours were bizarre, to say the least.  We began the day on Saturday with a text much improved from the day before, but with some major issues outstanding.  Ministers wrangled behind closed doors for most of the day, changing bits of text here and there.

We were preparing for Russia who, with Kazakhstan, Belarus and the Ukraine, were set to continue the talks way into Saturday night.   They were holding out in the informals, furious about the discussions on hot air.

Hot air

The “Russian factor” is one those of us who’ve been involved for a few years are all too familiar with. Just when you think there’s general agreement, in come the Russians who manage to drag the talks on for hours.

“Hot air” has been major problem with the Kyoto Protocol for years.  Somehow, the Russians managed to get the Kyoto negotiators to agree to a baseline of 1990, before the collapse of the former Soviet Union, which meant millions of tonnes of carbon credits ended up in the hands of Eastern European countries, bringing them a handy income, and other countries an easy and cheap option to do nothing at home and buy cheap hot air.  Russia has 6Gt of hot air – that’s how much it’s been cheating the atmosphere.

In Durban and Doha, New Zealand has sided with this team against the wish of the rest of the world to make sure that this “hot air” didn’t get carried over into Kyoto’s second commitment period (CP2).

Continue reading “The Doha Gateway: Look on my works, ye mighty, and despair”

Tim Groser shuts the stable door after the Mickey Mouse carbon credits have bolted

Mickey explains over supply in the offsets market

This week the Ministry for the Environment is consulting and seeking submissions on a proposal to ban some of the more ‘Mickey Mouse’ international carbon credits from the New Zealand Emissions Trading Scheme. Apparently this is because Climate Change Minister Tim Groser “wants to maintain the integrity of the ETS” (New Zealand Emissions Trading Scheme).

Thats really too much brazen and intentional cognitive dissonance, especially since Groser said that only five days after he indefinitely excluded agriculture from the ETS and only four days after he announced New Zealand would not sign up for a second commitment period under the Kyoto Protocol of binding greenhouse gas reductions.

I apologise if you had an extreme reaction to the close conjunction of the terms “Tim Groser”, “emissions trading scheme” and “integrity”. My apologies if you just coughed your coffee/beer/tea over your laptop or punched out your PC monitor.

Assuming you have cleaned up, I should provide the context for Tim Groser’s unintentional irony in claiming to be concerned about the integrity of an emissions trading scheme where emission units trade for less than $3 per tonne of carbon dioxide equivalent gas.

Here is the quote from Groser about the consultation.

Continue reading “Tim Groser shuts the stable door after the Mickey Mouse carbon credits have bolted”

Norwegian Wood (this exporter has flown)

The Mighty River Power 100MW geothermal power plant at Tasman Mill, Kawerau, NZ Norwegian wood and newsprint transnational Norske Skog Tasman (NZ) Ltd ‘exports itself’. Simon Johnson aka Mr February looks at the flight of another manufacturer and CO2 emitter and exporter as it lays off staff and reduces production. Wasn’t the very generous free allocation of units in the New Zealand Emissions Trading Scheme meant to keep exporters like Norske Skog Tasman in New Zealand? Or have we just removed the price signal from exporters for no valid reason and stuffed the NZETS?

The Herald reports that the Norwegian-owned newsprint-maker and transnational Norske Skog Tasman NZ has joined the ranks of export businesses like Rio Tinto Alcan NZ/NZ Aluminium Smelters who are exporting jobs off shore. Incidentally Rio Tinto Alcan NZ/NZ Aluminium Smelters have just been described as New Zealand’s biggest bludger.

Norske Skog is shutting down one of two newsprint machines at the Tasman Mill, in Kawerau, due to lowered demand for newsprint.

At the same time Norske Skog is investing $A84 million in new plant at the existing Boyer Mill in Tasmania with some substantial help from the Australian Federal government (A$28 million grant) and State government (A$13 million loan).

The NZ Government has been asked “what is being done for jobs”? And the NZ Government’s “market will take care of everything” approach has been called naive.

The NZ Herald mentioned the NZ emissions trading scheme (NZETS) only briefly in passing, as they noted the rock-bottom NZ carbon price and the poor despairing carbon foresters.

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Don’t worry Kyoto (National’s Only Looking Out For Its Friends)

The New Zealand government has announced that the country will not join the second commitment period of the Kyoto Protocol (CP2), but will instead make voluntary commitments within the Kyoto framework [Herald, NBR]. Climate change minister Tim Groser presented this move as:

…aligning [NZ’s] climate change efforts with developed and developing countries which collectively are responsible for 85% of global emissions. This includes the United States, Japan, China, India, Canada, Brazil, Russia and many other major economies.

To put it another way, New Zealand has chosen to abandon the 36 countries already signed up for CP2 — which runs from 2013 to 2020 — and instead aligns itself with the world’s worst polluters. Ironically, Groser rejected CP2 on the same day that Australia, only recently equipped with a meaningful carbon emission reduction scheme, announced it would sign up. The move completes the National-led government’s programme of gutting and dismembering the climate policies it inherited from the last Labour-led government when it took power in 2008.

Continue reading “Don’t worry Kyoto (National’s Only Looking Out For Its Friends)”