Tag: ETS

NZ ETS, you are the weakest (international) link

Simon Johnson (Mr February) argues that the New Zealand Emissions Trading Scheme (NZETS) is “the weakest link” due to its high exposure to the international carbon market. The strong “international linkage” is the other side of the coin of the uncapped design of the NZETS. Both features reinforce just how ineffective the NZETS is in providing an incentive to reduce greenhouse gas emissions.

Who remembers the The Weakest Link? The quiz show with Anne Robinson the disciplinarian female host with the popular catchphrase “You are the weakest link. Goodbye!” Yes that’s today’s bonkers metaphor for another post on the NZETS. In addition to the observation that I would love to say “Goodbye!” to the ETS, there really is a relevant connection to the economics literature.

“Linking” of emissions trading schemes means that units from one ETS can be imported and surrendered by emitters regulated by a different ETS. There are papers and blog posts about international linkage. The key economic benefit claimed for linking two or more ETS, assuming that they are otherwise sensibly designed, is that the lowest-cost ways of reducing emissions within the linked schemes become available (via emissions trading) to the emitters of the linked schemes.

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Groser underplays the real risks

I listened to Climate Change Minister Tim Groser being questioned about the ETS on The Nation last weekend and explaining that the government’s position on climate change action is that we will play our part in the global effort, doing our fair share but not more. It confirmed my impression that Groser’s focus is on our negotiating position, not on the reality of the threat of climate change. He is intelligent and articulate in his exposition and it all sounds reasonable as far as it goes. The fact that in terms of realistically tackling climate change the global effort doesn’t go nearly far enough was not mentioned during the interview either by the questioners or the Minister.

The government doesn’t deny the science. It doesn’t refuse to participate in global action. What more is it reasonable to ask? A good deal more, as I see it. The complacency which attends Groser’s defence of the government’s position is not justified when one considers the reality of climate change which is already unfolding around the globe and is only going to intensify.

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Government confirms NZ ETS to be watered down

I listened sadly on the news last night to the conviction with which the Climate Change Minister Tim Groser announced “This is not the time to put the foot on the accelerator”. Admittedly he followed immediately with “nor, as the climate change sceptics would have wanted us to do, to back the ETS truck up the drive”, but the unfortunate image remaining is of the ETS truck sitting idling at the foot of the drive waiting, or at best crawling at snail’s pace along the road.

Groser is not a climate change sceptic. He claims to fully accept the science. But he obviously does not accept the science when it says that it is already past time when we should have begun reducing emissions, and the window of opportunity is near closing. In other words this is the time to put the foot on the accelerator if we place any value on the human future, or have any care for those already enduring the adverse effects of warming.

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Business NZ: hands off our ETS handouts

Why is Business NZ putting its proverbial head above the parapet and expressing a view on the New Zealand Emissions Trading Scheme (the NZETS)? In this post, Simon Johnson argues that the ETS gives us the “Eyes Glaze Over” syndrome as it is a dead horse being flogged by the usual suspects. The NZETS is toothless by design. In both respects, Business NZ has got the Emissions Trading Scheme exactly how they want it.

Phil O’Reilly, the CEO of business lobby group Business NZ, has just written an opinion piece in the Herald on the New Zealand Emissions Trading Scheme (the NZETS).

I think I can guess what you are thinking.

“Oh no, an article about the NZETS…just the mention of it sucks the life out of me. I bet it has attracted a whole lot of crackpot denier comments. It’s so complex and full of jargon I don’t really know what to think about it. I find the whole subject just a turn-off. My Eyes are Glazing Over.

This is the entirely natural MEGO response, but you need to fight it! Most discussions of the NZETS descend into flogging the dead horse in order for the snake to swallow the elephant in the room sort of circularity.

We need to realise that this ETS inertia works to the advantage of the parties who gain from the current NZETS. That is of course, the big emitter business members of Business NZ. So, obtain a coffee or other stimulant and read on. I can help you through this. I have waded through Phil O’Reilly’s NZETS musings so you don’t have to.

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Pure Advantage: green growth is bigger than just carbon

Duncan Stewart manages the Pure Advantage programme and in this personal guest post addresses Simon Johnson’s criticism earlier this week that the new green growth report, New Zealand’s Position in the Green Race, fails to take carbon emissions reductions as seriously as necessary. Duncan is a director of investment and advisory firm The Greenhouse, an executive director of environmental compliance software company CS-VUE, and a board member of New Zealand’s electric vehicle association APEV.

The report is “good in parts” eh…? Well partly thank you. The headline provides some insight into your analytical approach; focus on carbon and dismiss the other environmental issues. OK, but in doing so you may have missed the point. NZ’s environmental performance is characterised by many different metrics — greenhouse gas emissions are just one of them. It’s certainly an important one, but no one is going to argue that the loss of native biodiversity is less important, or that methane trumps water quality.

These issues are all interconnected and need to be dealt with through a systemic change in the way we value and manage our natural capital.

Will the ETS fix declining water quality? I doubt it.

Will it provide healthier homes for kiwis? Probably not.

Therefore if clean/green New Zealand is an aggregate of a range of environmental performance metrics, it makes sense for Pure Advantage to identify and focus upon all of the key problem areas. The appropriate green growth solutions may be quite different for each, which is why it makes sense to use a cluster model to deliver these (or butterflies emerging from a chrysalis — whatever is easier to understand). Crosscutting issues such as education also need to be applied to address problems collectively.

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