So it goes

NZETS.jpg The cacophony of lobbying around the proposed Emissions Trading Scheme (ETS), coupled with high petrol prices, has prompted the government to announce a couple of changes to the scheme. Liquid fuels were supposed to enter the ETS in 2009, but this has now been delayed to 2011, and the phase out of the free allocation of emissions units to big emitters will now be postponed five years until 2018 [Herald, Radio NZ, Dominion Post].

Announcing the changes to the proposed legislation, Helen Clark also released the latest figures for the Kyoto liability:

… the provisional net position is projected to be a deficit of 21.7 million units during the first commitment period of the Kyoto Protocol (2008-2012). This compares with the projected deficit reported in May 2007 of 45.5 million units, and is a drop of 52 per cent. This means the liability halves from $1 billion to $481.6 million.

When the ETS was announced last year, it was projected that the net liability would be about 22 million units after taking the expected effects of the scheme on emissions into account. The government is clearly confident that high petrol prices will achieve the same effect as the ETS over the two year extension period. That’s a defensible position at the moment, but if fuel prices fall the Kyoto liability could increase. It signals, perhaps, that the government is reasonably confident that petrol prices won’t fall. Or perhaps simply that in an election year contentious new policy is up for grabs. The word pusillanimous springs unbidden to my mind…

The fuel move is getting the most attention, but the five year extension on allocations of free units to big emitters is a direct response to intensive lobbying from those sectors. It will significantly reduce the business costs of cutting emissions in the longer run, but also amounts to an extension of a tax payer subsidy to those businesses. It will be interesting to see how they respond. Looking into my crystal ball, I confidently predict someone will say “it’s a welcome move, but not big enough”.

The midweek omnibus: #37 (Putney to Peckham)

There’s been some good news, and not too much bad news. Let’s start with some good NZ news.

  • The Hillary Institute of International Leadership, launched in Antarctica a year ago with Sir Ed in attendance, has announced that “Leadership in….Climate Change Solutions will be the topic for the Institute’s first four year work-cycle, 2008-2012.” The Institute will appoint annual Hillary Laureates who will give public lectures in the US and NZ (the first in Christchurch in June), and a major award, to be called the Hillary Step, in 2012. There will be substantial cash awards – they’re aiming for $1 million by 2012. Good interview on Radio Nz National earlier this week (scroll to 18:46) with an Institute spokesman. Meanwhile Helen Clark won an United Nations Environment Programme (UNEP) Champions of the Earth award, which recognises individuals from each region of the world who have shown “extraordinary” leadership on environmental issues. The cynic in me comments that if wishes (and good words) were horses, she’d be riding a virtual Melbourne Cup winner. Unfortunately, in the real world she’s stuck on My Little Pony.
  • Christchurch Airport has achieved carbon neutrality through Landcare Research’s CarbonZero programme, making it the second in the world to do so (behind one in Sweden). Good marketing, at the very least, though it would be better if the international tourists arriving were as well offset.
  • Mass market electric vehicles take a step closer with announcement of a deal between Project Better Place, Renault-Nissan and the Israeli government. “The Israeli government would provide tax incentives to customers, Renault would supply the electric vehicles, and Project Better Place would construct and operate an Electric Recharge Grid across the entire country. Electric vehicles will be available for customers in 2011.” According to the launch press release, the scheme will use an “innovative business model” where drivers will not have own a battery, but will subscribe to the service on the basis of kilometers driven. This (and the tax incentives) will presumably keep the cost of the cars down. Over to Meridian… (Hat-tip: Joe Romm at Climate Progress). Meanwhile, Tesla are promising to (finally) deliver the first of their electric sportscars in March.
  • The EU has announced its climate plan, designed to reduce European emissions by 20% by 2020 [Economist, New Scientist, Guardian], and there will undoubtedly be a lot of fighting over how individual countries targets have been allocated. Meanwhile, the US has warned the EU not to use climate policy as a trade barrier, and the EU has warned the US that if it has no climate policy its products will face tariffs.
  • Technology Review has more on the Australian hybrid battery being successfully tested, and the BBC had a reporter on the Beluga as it began its transatlantic voyage to test the SkySail kite system.
  • Gar Lipow has made the full text of his book No Hair Shirt Solutions to Global Warming available as a free download [PDF]. I’m looking forward to reading it.
  • The BBC has done a couple of good pieces on king tides in Tuvalu and sea level rise, and The Economist finds encouraging signs of the success of eco-labelling (especially of sustainably harvested fish).
  • More wind farms on the way: Meridian has announced it intends to proceed with a 31 turbine installation in Wellington’s Ohariu valley – the $420 million Makara development. Meanwhile the Herald prints poet Brian Turner’s thoughts on the impact of wind farms on the NZ landscape. I don’t necessarily agree with his take on wind energy, but it’s hard to disagree with his conclusion: “Our oft-warbled claims to be ahead of the game and clean and green are no more than self-congratulatory chitter. Sort out what you think our legacy ought to be, people, and stand up for it before it’s too late.”
  • Finally, Weather Channel senior meteorologist Stu Ostro continues his analysis of weather developments in the northern hemisphere, and how they could be (or already are) are sign of the impact of rapid climate change. Well worth a read if you are in the slightest weather literate, and worrying for those who are. And lest we relax, scientists at the University of Colorado at Boulder report that the ice cap on Baffin Island in the far north of Canada has reduced in size by at least half over the last 50 years.

Blues from an airplane

Two Otago University physicists, Inga Smith and Craig Rodger, have calculated the CO2 equivalent emissions generated by international tourist visits to NZ, and find that in 2005 the return flights accounted for almost 8 million tonnes of CO2e – about the same as emissions by the country’s entire power sector – around 10 percent of total NZ emissions. They then calculated what it would take to offset those emissions in NZ, and found that most approaches were either not feasible or too expensive. Not suprisingly, this has got quite a few people in a tizzy (Herald & Herald, NBR, Stuff, NZ News UK), because if international travellers begin to worry about their carbon footprints, then 20 percent of our export earnings are at risk.

This is not news. I drew attention to this vulnerability in Hot Topic. Air New Zealand has been very keen to establish its green credentials by working with Boeing on biofuels for avation, and looking at offset schemes in the conservation estate with DOC. In fact the whole tourism sector has seen this coming for some time. What’s interesting is the numbers, and I won’t be commenting on those until I’ve had a chance to see the paper. There are a lot of open questions, too, about how to approach offsetting our tourism business. The authors appear to assume that this should all be done in NZ, and therefore make Helen Clark’s “carbon neutral country” ambition harder to achieve – in fact the NBR (and David Farrar) seem keen to spin this as a government policy problem. The NBR’s intro (above an otherwise fine story) is particularly egregious:

New Zealand’s adoption of a carbon neutrality policy, and the world’s toughest emission reduction targets, will have a disastrous effect on its biggest foreign exchange earner, tourism, and there are no solutions in sight, university experts say.

Now I don’t think that’s what Smith & Rodger were saying at all, but I’ll wait until I see the paper…

There are lots of things to consider. First, the global aviation industry is working on its own emissions regulation framework in part to try and forestall the sort of mandatory scheme threatened by Europe, and as a PR exercise to keep valuable long distance travellers flying. So airlines are likely to be looking at an international offset scheme. Within that, there will have to be some rules about where the emissions generated by travelling are accounted for. All incoming flights in the destination nation, perhaps? Not good news for NZ because of the length of our flights, but there’s nothing to say that the offsets have to be created in that country. Officials looking at ways of achieving Helen Clark’s carbon neutral ambition are already considering that it might be achieved by buying reductions in other countries. And if that’s the cheapest way to do it, why not?

But the fact remains that tourism in NZ is exquisitely vulnerable to consumer perceptions in our prime markets. If long distance flights become uncool, business here will suffer. Like the food miles issue, this is not something we can dodge – it has to be confronted head on. It’s not a problem of the government’s making, but it is one this government (and the next one) will have to help with.

Big emitters bite back

 Wp-Content Uploads 2007 09 Nzets1-4NZ’s big greenhouse gas emitters have begun a push back against the government’s Emissions Trading Scheme (ETS) and energy strategy. Last week an industry group including the Greenhouse Policy Coalition, Federated Farmers, the Major Electricity Users Group, Business Roundtable, the Chambers Of Commerce, and others wrote to Helen Clark warning that, as Colin Espiner in The Press reported, “the Government’s proposed Energy Trading Scheme (ETS) is being rushed through Parliament without adequate consultation with industry. It says the Government is refusing to release any economic analysis to back its claims the new system will have a negligible impact on economic growth.” Fran O’Sullivan in the Herald provided more context, with news of the first meeting of the government’s Climate Change Leadership Forum, but it’s clear that a coordinated effort to derail the ETS is under way.

Continue reading “Big emitters bite back”

Biofuels to fly, and other stories

747Air New Zealand is carefully positioning itself as a climate-friendly airline with its latest announcement that it is to trial biofuels in a 747 flight from Auckland in the next couple of years. Working with Boeing, Air NZ will be part of the first commercial trial of biofuel, in a Rolls-Royce-powered jumbo in the next 18 months . The flight will only use biofuel in one engine, and will not carry customers. [Stuff, Herald, BBC, June HT blog on aviation biofuels].