Trans-Tasman Emissions Trading Scheme Challenge: Part Two

With the passage of the Australian “Clean Energy Future” legislation, Simon Johnson (aka Mr February) makes another trans-tasman emissions trading scheme comparison.

Yesterday the Australian Parliament adopted legislation for its greenhouse gas emissions trading scheme. It’s time, therefore, for another post on the theme of the “Trans-Tasman Emissions Trading Scheme test series”, looking at the key differences between the New Zealand Emissions Trading Scheme and the Australian Emissions Trading Scheme. The number one key difference between the two emissions trading schemes is in how clearly each scheme sets the carbon price.

Continue reading “Trans-Tasman Emissions Trading Scheme Challenge: Part Two”

The long history of hot air and inaction

In a comment on Tom Bennion’s recent post on the water crisis in Tuvalu and Tokelau Gareth drew attention to an article in the Economist which sounded similar themes. Small island states are well aware of the danger in which they stand and of how grudging any help is likely to prove:

Australia has turned down Tuvalu’s request for an emergency migration programme that would resettle the islanders. Even a €90m ($119m) aid package to tackle regional climate change pledged earlier this year by the European Union has done little to tamp down its fears.

The leaders of countries as far afield as Barbados and Grenada joined Tuvalu in raising the alarm over the issue in a series of impassioned speeches to the United Nations General Assembly last month. Ralph Gonsalves, the prime minister of Saint Vincent and the Grenadines, laid the blame for the current debacle squarely at the feet of developed economies.

He was “baffled” he said, “by the intransigence of major emitters and developed nations that refuse to shoulder the burden for arresting climate changes that are linked to the excesses of their own wasteful policies.” As it happens, the first states to experience the effects of climate change as an existential threat are among the world’s smallest, most isolated and least powerful.

What particularly caught my attention in the Economist article was a link back to a past story published in the magazine in 1997. It was revealing both of how long the island states have been anxious and of how summarily those concerns have been treated by the more powerful.

Continue reading “The long history of hot air and inaction”

120% Pure Subsidy

Nick SmithLast week, (29 September 2011 to be precise), Green MP Kennedy Graham was questioning Climate Change Issues Minister Nick Smith over his apparent lack of consistency on subsidies for fossil fuel industries. Graham was wondering why Nick Smith and Climate Change and Trade Negotiations Minister Tim Groser were happy on the one hand to oppose billion dollar subsidies to fossil fuel industries on the international stage, while on the other hand have the New Zealand Emissions Trading Scheme include subsidies in the form of generous free allocation of emissions units to big industrial emitters of GHGs.

Nick Smith replied:

“…this Government is not providing subsidies to greenhouse gas polluters. I remind the member that we are the only country outside the EU to have an emissions trading scheme. Our aluminium smelter in Bluff is the only aluminium smelter in the world to face any price at all for its greenhouse gas emissions”.

Lets examine this assertion in two parts; that the Tiwai Point Aluminum Smelter, receives no subsidies from Government and it faces a carbon/GHG price.

Continue reading “120% Pure Subsidy”

Dismissing Greens’ plan out of hand not justified

The immediate government reaction to the Greens’ announcement yesterday of their “100,000 green jobs” policy was to defend the economic status quo.

The Prime Minister John Key:

“They are talking about putting enormous taxes on New Zealand that would send a lot of businesses bankrupt.”

Transport Minister Steven Joyce weighed in:

“What they’re proposing is to add lots of costs, add lots of taxes and then magically, supposedly, all the jobs would be in place.”

The Greens’ proposals for raising the money to fund the green jobs initiative include a capital gains tax, a temporary levy on income to fund the rebuilding of Christchurch, a cutback on new motorway spending, and a toughening up of the generous subsidies offered by the ETS in its current form. I presume these are the costs and taxes that so alarm Key and Joyce. Continue reading “Dismissing Greens’ plan out of hand not justified”

The Minister’s chart-junk part 2

Simon Johnson guest posts on the mysterious number of emissions units allocated to emitters and a junk chart in the Ministry for the Environment’s Report on the New Zealand Emissions Trading Scheme.

You may recall that I previously commented on the low quality of data presentation in the Ministry for the Environment report Report on the New Zealand Emissions Trading Scheme.

My specific concern was that the report did not clearly indicate how many emission units (NZUs) had been allocated for free to emitters. Or, to say that again but slightly differently, what was the level of subsidy emitters had received in units?

Why am I going on about subsidies? Well, the point of an emissions trading scheme (ETS) is to place a carbon price on emissions. Free allocation of units to emitters unequivocally lessens the incentive effect of the carbon price. So free allocation is unequivocally a subsidy.  The Australian Productivity Commission research report on carbon prices Carbon Emission Policies in Key Economies notes that all emissions policies involve either subsidies or prices and that imposing one measure implicitly imposes the other as well  (page 49). Continue reading “The Minister’s chart-junk part 2”