How fast shall we drive over the cliff? NZ’s ETS watered down (again)

By Mr February 04/09/2012


How fast shall we drive over the cliffSimon Johnson looks at the Government’s amendments to the New Zealand Emissions Trading Scheme and concludes we are arguing about what gear to drive in as we speed towards the cliff. The Government has kindly given us the opportunity to make a submission about how fast fast we should go over the emissions cliff. Time to fasten your seatbelts.

Back in July, Tim Groser announced more watering-down of the New Zealand Emissions Trading Scheme (NZETS). About a week ago, on 23 August 2012, Groser introduced the amending legislation – the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. Consistent with previous emissions trading scheme legislation, the bill will be fully and rationally considered by Parliament’s Finance and Expenditure Select Committee in an insultingly short period of time – ten working days. The closing date for public submissions is Monday, 10 September 2012.

What does this ETS amending bill do?

  • It indefinitely postpones the entry of pastoral agriculture into the NZETS.
  • The ‘two-for-one’ deal, which halved the number of carbon credits each emitter had to surrender for a tonne of carbon dioxide equivalent greenhouse gases, is extended for another three years. It was to end on 31 December 2012, but will now run on at least to 2015.
  • The price cap of $12.50 per tonne ($25 for two tonnes) will also extended. It was to end on 31 December 2012, but will now run on at least to 2015.

What doesn’t the bill do?

  • It ignores the recommendation from the 2011 ETS review committee to stop the unlimited use of international carbon credits by New Zealand emitters. Which as we know, makes the NZETS the weakest link.

Whats the cliff we are driving off? Well, it’s climate change. And it’s the price of the New Zealand emissions unit.

NZ Unit price 2009 to 2012 from OMF Financial Ltd

Who said what about the bill?

Simon Terry of the Sustainability Council said that the NZETS is now in a state of eternal transition”.

Helen Clark stated the obvious, that pastoral agriculture must be in the NZETS; “You can’t have your major sector generating greenhouse gases outside the scheme.”

A Federated Farmers spokesperson said the deferral of agriculture was huge win for New Zealand’s farmers.

Business New Zealand seem unusually silent. I guess for them it is all going to plan. Back in July they welcomed Tim Groser’s announcement of the delays to the NZETS. So why waste space repeating the message?

However, I do offer some relief from this dreary “business-as-usualism”. Green MP Kennedy Graham has given some strong speeches accurately reflecting both the scientific reality of the cumulative carbon dioxide emissions and the ethical challenge of the failure of politics and governance to respond.

None more so than in his ‘first reading’ speech in which he summed up the bill thus:

Today’s bill will defer agriculture indefinitely, defer any increase in the price cap, defer the one-for-one surrender obligation, allow a greater switch from forestry to dairying, and enable importers to increasingly use dangerous synthetic gases. What remarkable, steel-like resolve!

I do recommend you read Kennedy Graham’s speech in full. Graham, a much more experienced diplomat than Tim Groser, walks us through more than 20 years worth of futile international climate change negotiations, all the while as the relentless accumulation of emissions in the atmosphere uses up the carbon budget consistent with limiting warming to two degrees. And with no faux-realist “get people on the bus” cliches we have come to expect from Tim Groser.

Kennedy Graham concludes that we don’t have to accept this state of affairs. He calls on us to make a submission to the Finance and Expenditure Select Committee.

Greenpeace are also saying get stuck in with a submission. What should one say?

How about “the NZETS is completely ineffective in reducing GHG emissions due to it’s many design flaws – the use of unlimited international junk credits, the delays and exemptions, the partial coverage, the lack of a cap, the price ceiling, the lack of revenue recycling due to the excessive free allocation to emitters.” Something brief and to the point.

However, I will leave the last word to Jeanette Fitzsimons speaking on TV Ones’s Q+A: Panel after a Nick Smith/Russel Norman debate back in September 2011.

“Look, its like we are in a very fast car, we are heading towards a cliff, which is getting really close, and we are arguing whether to change from fifth to fourth gear”.