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.”

7 thoughts on “Weakened ETS now law”

  1. It is just gobsmacking. Nick Smith could only make the NZETS worse by introducing carbon credit surrender obligations for permanent forest sinks, the Department of Conservation, the Greens, Greenpeace, and anyone else who disagrees with him. It will be remembered as the ‘world’s worst emission trading scheme’, not as the ‘world’s first emission trading scheme’.

  2. Yes New Zealand should be ashamed. Think of all the other nations in the world to have ETS’s far stronger than ours!

    The EU includes only CO2 emissions from selected industries and covers a whopping 40% of total EU emissions. And they only give 90% of units as allocations.

    The Aussies and US haven’t yet passed schemes into law, but they will! And the proposals they have are so different to Nick Smith’s…. The US will include all gases except agricultural and allocate 85% of units free, while the Australian scheme is SO DIFFERENT TO OURS RIGHT??

    And the US scheme will be phased in from 2012-2016, the Aussies from 2011. When does ours start again?

    Yes New Zealand is defiantly a climate laggard. We should be doing as the rest of the world is and implementing comprehensive ETS’s, not bowing down to corporate interests that hate our grandchildren’s grandchildren!

    So yes, National campaigned on not leading the world in climate policy, but this is not even middle, this is some NZ should be ashamed of!

  3. Gareth

    I think that it is now more productive to treat this ETS fait accompli and as the basis of future ETSs, which are progressively more comprehensive and effective. We need to think about how we can modify this ETS to something more effective when the political landscape changes. By which I don’t necessarily mean a change to the left in NZ I mean when the global political consensus moves beyond just rhetoric.

    In the interim I would strongly recommend that the new lot of welfare bludgers start now thinking about how they will wean themselves off the taxpayers’ teat.


    1. There’s no doubt that flexibility will be required. I’ve said many times that the risk is not that the world will decide to do nothing, but that it will (eventually) panic and start taking draconian action. We need policy that can be ramped up smoothly in line with our international commitments.

      For the time being, my feeling is that we need two approaches — a focus on personal commitments to emissions reductions (10:10) to make lowering carbon fashionable, and try to bring home to the National caucus the real gravity of the situation confronting us all. Perhaps every National MP should discover that they have a “climate buddy”, whose job it is to keep them up to date… 😉

      1. The panicy response is also a concern in the energy arena.

        There is more and more evidence that the global peak in oil production is nearer than previously (officially) thought.

        My concern is that the global economy will try and sustain the currrent transport paradigm using coal, lignite, tar sands, kerogen, and methane caltrates. The implications of these options on climate and other environmental effects are horrendous.


  4. If people really understood how many “holes” there are in this ETS they would be stunned. Example : Genesis has a built up a large coal stockpile at Huntly. Under the law this is stock and does not count for emmissions when burnt. As a result Huntly will have no emmission cost for 12 to 24 months coming up. One of many for anyone who really wants to dig into the regulations and understand how careful accounting will avoid many costs for emitters.

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