NZ ETS to be watered down (again), but emissions news good

New Zealand’s new Minister for Climate Change Issues and chief climate negotiator, Tim Groser, yesterday announced the government’s intended changes to the Emissions Trading Scheme following last years ETS Review. There will be a limited period for consultation (to May 11) on the proposals before legislation is put before Parliament. The consultation document (PDF) and meeting dates are available here. Key points:

  • Agriculture’s entry to the ETS may be delayed beyond 2015.
  • There will be no increase to the $25/tonne unit price cap.
  • The “two for one” transitional provision for big emitters will be phased out more gradually.
  • The government will give itself powers to auction emissions units.
  • There will be a review of the allocation of carbon credits to pre-1990 forests to take into account the changes to the forestry regime agreed in Durban last year.

Groser also announced the release today of New Zealand’s net emissions position for the 2008-12 Kyoto reporting period, now expected to be a surplus (that is, under NZ’s target) of 23.1 million tonnes, up from 21.9 mt in 2011.

News that agriculture may continue to escape carbon constraints is hardly surprising, given the government’s reluctance to annoy its heartland farming and agribusiness supporters, but it appears willing to risk confrontation with Maori forestry interests on pre-1990 carbon credit allocations. My view is that this tinkering around the edges of the scheme is designed to put the ETS into a kind of domestic political holding pattern until the shape of future international arrangements begins to emerge. Groser doesn’t want to frighten the horses until he absolutely has to, as this quote from Brian Fallow’s piece in the NZ Herald today might be taken to indicate:

Preferences for changing areas of the policy would vary a lot depending on what assumptions were made about the future carbon price, Groser said.

“If you think it will remain at the current low levels, you will reach one set of conclusions. Take a different view of the trajectory of the carbon price – and above all, this is a long game we are playing – and you may reach quite different conclusions.”

Getting international action on emissions reductions is certainly turning out to be a long game. We can only hope that it doesn’t turn into the diplomatic equivalent of a timeless test, and that the climate system is kind enough to give us time to play it. I’d not want to bet on either proposition.

Stating the pleading obvious (big dairy and the ETS review)

A commenter or two has started to hit back at the NZ Emissions Trading Scheme Review 2011 and the New Zealand Herald editorial Farmers must share burden on emissions for saying that there should be no further delay of the 2015 date when agricultural emissions will enter the New Zealand Emissions Trading Scheme (NZ ETS). The Herald editorial had the temerity to comment on the government’s “extraordinary generosity to farmers” in changing the “modest impositions” of the NZ ETS on agriculture so that it “will become truly timorous”.

David Anderson, who is described as a former editor of Rural News and a communications consultant in “teh” (sic) agribusiness sector, has just had an opinion piece in the Herald (27 September) arguing for further delaying agriculture’s entry into the NZ ETS.

Continue reading “Stating the pleading obvious (big dairy and the ETS review)”

The billion dollar gap

Dr Jan Wright, New Zealand’s parliamentary commissioner for the environment, today released her submission (pdf) to the Emissions Trading Review panel. It calls for a significant toughening up of the scheme that was so extensively watered down by the current government in 2009, in order to avoid a billion dollar per year cost to taxpayers. Wright’s recommendations make it clear that any further weakening of the scheme as the result of pleading by special interests can not be justified. She recommends that:

  • both the price cap and the two-for-one deal expire on 31 December 2012 as currently legislated.
  • a) a cap on the number of carbon credits freely allocated be put in place; and that
    b) the phase-out rates for allocation be increased, not expressed as a percentage decrease of the previous year, and that the latest year in which allocation of free carbon credits must cease be specified.
  • the ETS is amended:
    a) so that new industries that use lignite on a large scale are specifically excluded from receiving any free carbon credits;
    b) to provide criteria for deciding which new activities are eligible to receive free carbon credits, including a requirement that the new activity will reduce New Zealand’s national net greenhouse gas emissions.
  • agriculture is brought into the ETS by 2015 as currently legislated.

The submission contains a picture worth at least a thousand words: this graph makes it very clear why the NZ ETS needs toughening up:


Current policy settings effectively guarantee that the government’s Copenhagen Accord commitment to a 10% cut in emissions by 2020 is nothing but an empty promise. The ETS is not delivering the goods — and it will be the taxpayers that pay the cost. Wright estimates that the “gap” between target and projected emissions “is likely to cost New Zealand over a billion dollars per year” by 2020.

The odds are much worse than 50-50

Nick Smith, NZ’s climate change minister, told the Bluegreens forum in Akaroa last weekend that the government was considering gazetting their “50 by 50” target for carbon emissions — a 50 percent cut in emissions by 2050. That target has been National Party policy since before the last election, so the only real news is that the government is considering making it “official”, in the terms of the Climate Change Response Act 2002. Smith continues to represent this target as challenging (which is true), and in line with other countries commitments (which is less so), but where it really falls down is by being completely out of line with what is actually required if we are to avoid the worst effects of climate change in the future.

The last time the government considered emissions targets was in the run up to the Copenhagen conference in 2009. At the time, I posted an analysis of global and national emissions targets — The First Cut Is The Deepest. It still remains valid today, made more piquant by the sense of impending changes of climate and the notable extreme weather events that have accumulated since. Here’s my simplified cheat sheet…

Continue reading “The odds are much worse than 50-50”

Weakened ETS now law

The government’s amendments to the Emissions Trading Scheme became law this afternoon, thanks to support from the Maori Party [Stuff, Herald, Reuters]. Nick Smith called the changes “workable and affordable” and said that they struck “the right balance in protecting the future of our economy and our environment”, but Labour climate spokesman Charles Chauvel was scathing:

It is economically irrational, socially inequitable, environmentally counter-productive and fiscally unsustainable. And its hallmark has been one of poor procedure and hasty consideration.

But what does the new ETS mean for New Zealand’s emissions? The Science Media Centre is collating responses from the science community, and first out of the blocks is VUW associate professor Ralph Chapman:

The passing of today’s Climate Change Response amendment bill through the House is deeply disappointing. Every week, emerging climate science underlines the need for urgent action to cut emissions drastically, with developed countries especially needing to make cuts right now to avoid a global warming drift above 2 degrees, the guardrail against dangerous change. The Government’s amendment bill does way too little to bring down New Zealand’s emissions. The bill has good aspects (e.g. agriculture is included, eventually) but its overall weakness and lack of clarity about its impact on emissions will undermine New Zealand’s reputation and positioning for Copenhagen.

Deeply disappointing. Pretty much my reaction. NZ has now has a much steeper hill to climb in future than was necessary.

Update 28/11: Additional responses from science community, courtesy of the SMC:

Dr Jim Salinger, an Auckland-based climate scientist, comments:

“At present we appear to be bogged down in emission reduction schemes and targets. This thinking is short-term as the high emissions industries in the long run are doomed. We have the low-carbon technology –- which include many forms of renewable energy such as solar electric, solar thermal, wind, wave, tidal, geothermal and bio-energy. All we need to do is scale these technologies up rapidly and harvest the economies of scale.”

Suzie Greenhalgh, Senior economist in the Sustainability & Society team at Landcare Research, comments:

“The passing of the ETS ammendments sends positive signals about New Zealand’s desire to address global climate change, providing greater certainty to business and the population about the path New Zealand will follow. Given that most of the debate so far has been around the risks New Zealand faces with adopting the ETS, now perhaps the debate can switch to where potential opportunities may lie. The inclusion of agriculture, despite its omission in other national schemes, is also an important step for New Zealand’s management of greenhouse gas emissions and may just provide some of these opportunities.”

Associate Professor Euan Mason, of the School of Forestry at the University of Canterbury, comments:

“It is good that New Zealand has begun to address climate change, and if the energy sector is required to surrender credits earned from genuine CO2 sequestration then the ETS should begin to change our behaviour in helpful ways. In its deal with the Maori party the Government implicitly acknowledged that the ETS legislation markedly devalues pre-1990 forest land and that the few credits offered to owners of such land are inadequate compensation. Offering owners of pre-1990 forests the option of replanting elsewhere after land use conversion as an alternative to paying conversion tax would have gone some way to softening the impact on land values. As it stands only a proportion of these land owners have been adequately compensated, and the remainder, both Maori and Pakeha, no doubt feel a sense of injustice.”