Tag: National

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…

ETS report: wishy-washy and a waste of time

The ETS review committee has published its report [PDF here], and recommends that an all sectors, all gases emissions trading scheme should be the “primary economic mechanism” in the government’s response to climate change. However the report makes very little in the way of substantive recommendations about how the current ETS legislation should be amended. Agriculture should be included, and forestry given legislative certainty, but there’s no detail on how the current ETS timetable could be altered. The report’s main conclusions appear to echo climate change minister Nick Smith’s recent comments on the likely future course of climate policy — but effectively give him a free hand to do what he wants.

The majority report — supported by National and United Future — is accompanied by minority reports from Labour, the Greens, the Maori Party and ACT. Labour, the Greens and the Maori Party want tougher action, while ACT still denies the reality of climate change. The Maori Party and ACT would prefer a carbon tax to an ETS, but are otherwise on different planets. This leaves National trying to drum up support for amending legislation, but unable to rely on anyone other than Peter Dunne. Meanwhile, Labour is still offering an olive branch: they’ll support amending the current ETS, but not if it means huge taxpayer subsidies to big emitters or cripples forest planting.

Here are some of the report’s key findings:

Continue reading “ETS report: wishy-washy and a waste of time”

“The irresponsibility and immorality of climate change denial”

Krugman.jpg When does opposition to action on climate change cross the line between legitimate political debate and enter the realms of irresponsible, immoral and dangerous inaction? Paul Krugman, professor of economics at Princeton, Nobel prize winner and New York Times columnist is in no doubt: most of those who voted against the Waxman-Markey emissions reduction bill in Washington earlier this week breached all the principles of good governance.

…most rejected the bill because they rejected the whole notion that we have to do something about greenhouse gases. And as I watched the deniers make their arguments, I couldn’t help thinking that I was watching a form of treason — treason against the planet.

To fully appreciate the irresponsibility and immorality of climate-change denial, you need to know about the grim turn taken by the latest climate research.

Krugman mentions MIT’s revised projections, and the Copenhagen synthesis report analysed in recent posts by Bryan Walker conveys the same message. But it was the quality of the debate in Congress that really upset him…

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The moneygoround

NZETS.jpgBack in March climate change minister Nick Smith decided it was time to sort out whether the Emissions Trading Scheme was a recipe for economic disaster, as ACT and big emitters were insisting (using figures from a shonky report by NZIER), or affordable, as Treasury modelling (conducted by Infometrics) showed. Smith commissioned both economic consultancies to work together to arrive at a consensus, which they were happy to do (at a cost of $79,200 + GST). The result of this ministerial banging of heads was released yesterday [PDF], and it is simultaneously interesting, encouraging and profoundly disappointing.

Continue reading “The moneygoround”