By Mr February 01/03/2016 3


Simon Johnson looks at ‘fix the ETS’ metaphors and argues that trying to incrementally ‘save’ or ‘fix’ the NZ Emissions Trading Scheme will ensure it remains ineffective in reducing domestic emissions for decades. Politically, its just flogging the dead horse. We don’t have time for a unending institutionalised cultural conflict over ‘fixing the NZETS’ like the one we have had for ‘fixing’ the Resource Management Act.

In my last post I used the metaphor or framing of ‘arguing over the gears while accelerating towards a cliff’ for the latest review of the New Zealand Emissions Trading Scheme.

Other commentators are using a very different framing for the review; that of ‘fixing the NZETS’. For me that raises some fundamental questions. What are the political advantages and disadvantages of the two framings? Where will each framing lead us? Which framing is more ‘science-informed’?

Brian Fallow, Generation Zero and Geoff Simmons (of the Gareth Morgan Foundation) are all accepting the ‘fix the NZETS’ framing in their comments on the review. Geoff Simmons heads up his second post in two days on the NZETS review How do we save the Emissions Trading Scheme?.

Brian Fallow starts his Herald column “Possible adjustments to the Emissions Trading Scheme aren’t much, but at least they’d be a start”.

Geoff Simmons and Brian Fallow do a double act of analysis on the NZETS review. I totally respect both Geoff and Brian in their intentions and views and understanding of the NZETS. However they both accept this inherently incremental ‘fix the NZETS’ framing of the politics. Here’s their discussion.

I think this framing, ‘fixing the NZETS’ is fundamentally wrong in it’s politics.

One key point from my last post was that this NZETS review has reversed the burden of proof. The allegedly temporary and allegedly transitional ‘moderating features’ are now the status quo or the default settings in the NZETS.

Policy analysis and assessment now has to be prepared and presented to show that each flawed ‘moderating feature’ of the NZETS won’t harm business interests. Queue the technical report Economic impacts of removing NZ ETS transitional measures by New Zealand Institute of Economic Research.

We need to remember there are a lots of ‘cost moderating’ features (flaws) still in the NZETS: unlimited international linkage and importing of overseas units (access to which officials are trying to restore), overly generous free allocation of units, the hang-over of surplus units in the market, the lack of auctioning (well there is no point having an auction if there is a huge surplus of units).

And the ultimate flaw in the NZETS is that half of New Zealand’s greenhouse gas emissions, those from pastoral agriculture, seem to have a permanent get-out-of jail card.

So we have an emissions trading scheme with multiple flaws. The politically selected burden of proof provides a high hurdle for change each time the hapless officials attempt to remove the flaws. All the lobbyists join in as they already have the dates in their calendars.

Also, what is the messaging you need to do if you are promoting long-term incremental reform of the NZETS?

Well, first of all and before explaining your ‘fix’, you have to try to explain the NZETS from square one for each increment (again and again!). Geoff Simmons gets this as one of his other recent NZETS posts is white board Friday emissions trading for dummies.

The trouble with this is that explaining the NZETS is 95% impossible! I suggest from my own experience that most people find the NZETS the ultimate “My Eyes Glaze Over” topic. Poor old Geoff Simmons better to be ready to do another decade’s worth of ’emissions trading for dummies! To borrow a metaphor from the centenary of the First World War, incrementally fixing the NZETS is like winning the trench warfare one shell hole at a time.

Compare that with the explicit message from the fast-car-to-cliff NZETS metaphor. The NZETS is not effective. It is not worth saving. It’s got to go. Three four or five word sentences. Message transmitted loud and clear, over.

You need more convincing?. Let’s look at one of Tim Groser’s last statements as Minister for Climate Change.

First Groser praises Labour for their shared consensus on having an emissions trading scheme.

We have an understanding that there are certain policy frameworks in New Zealand which take decades to put in place, and where you need a very high degree of consensus – particularly amongst the two major parties of Labour and National – on at least a structure of a policy response.

Labour have supped the kool-aid and have bought into this framing. As shown by this statement to Forest and Bird during the 2014 election campaign.

Labour’s preferred means of pricing is to fix the the existing ETS. Using an ETS to price carbon is the only broad area of agreement in climate change policy, particularly particularly between the two largest parties (despite National’s lip service for an ETS). Labour would not throw that agreement away lightly to start again with a carbon tax.

In other words, Labour will flog the dead horse better than National. As I noted in 2014:

National and Labour in effect have the same policy narrative that explains the problem; ‘THEY undermined the NZETS’, and a narrative solution, ‘WE will fix the NZETS’. This creates the on-going cycle of the ‘horse is under performing’ and the narrative solution (keep flogging the horse). But beneath the impenetrable detail and complexity of the arguments about fixing the NZETS, it will remain ineffective.

Groser saves his well-known invective for Russel Norman and the Greens and their carbon tax policy. And stretches a very long bow to equate that policy with the Rudd-Gillard-Rudd Australian Labor Prime Ministers’ revolving door.

What I didn’t appreciate was that Russel Norman — then leader of the Green Party — saying you want to throw the policy structure away and have a carbon tax… I can guarantee you what that would have done — it would have set us back on a cycle of internal political conflict, which would have repeated exactly the problem in Australia.

Groser concluded:

I do not believe there is anything fundamentally wrong with the emissions trading scheme.

I rest my case that the best science-based and ethically based climate mitigation policy is the opposite of what Groser says!

A ‘horse-flogging’ process of ‘fixing the NZETS’ will last a very long time – if it ever concludes. It could just become an social and cultural institution like the never-ending debate over the Resource Management Act. In a previous post I used the metaphor of flogging the dead horse after the snake swallows the elephant in the room to describe this possibility.

Applying the maths of our carbon budgets, Kevin Anderson’s analysis and the Paris Agreement, we just don’t have enough time for a never-ending institutionalised horse flogging debate over the NZ emissions trading scheme. The political goal must be to remove the social licence of the NZETS, to de-legitimize it in the eyes of the public and then to scrap it so a simple carbon tax can be adopted instead.

Featured image: Flickr CC, eltpics.


3 Responses to “Fixing the NZ Emissions Trading Scheme is just flogging the dead horse”

  • Mr February you say “We don’t have time for a unending institutionalised cultural conflict over ‘fixing the NZETS’ “.

    This debate, if it can be called that, is possibly the most amazing I have ever seen about anything anywhere in my life, and your comment is the most wonderful exemplar of it.

    Global warming is a global problem. Is this not so? Yes, it is. It is not what we do, but what we all collectively do, that matters.

    What NZ pumps out into the atmosphere that worsens this problem is regrettable.

    However, what does this amount to? I have waited for some considerable time to see anyone at all state in public what NZ’s emissions are in terms of this global problem. Instead we see the tonnages of carbon pumped out recited without any comparison to the global problem at all..

    Well, according to Wikipedia the NZ share of global emissions is 0.2 per cent. For the innumerate, this is nought point two per cent.

    I would think that a concerned environmentalist – such as, for example, myself – would think twice before getting too hot under the collar about New Zealand’s emissions.

    Whatever New Zealand does or does not do in terms of emissions in this country is negligible. What is wanted is results. We won’t get them here even if we go beyond “carbon neutrality”.. All this argy-bargy is foolishness writ large.

    So instead of getting tied up in an endless round of counter claim and accusation about how to achieve a negligible result, it would seem to me to be much more profitable to consider ways New Zealand and New Zealanders might assist in other places to achieve non-negligible results.

    This is particularly relevant in view of the claim* that to reduce emissions in New Zealand is more expensive than other places. If this is a situation where “we don’t have time” – you wrote this, Mr February, and I’m holding you to it! – the places to look to reduce emissions are the largest and cheapest ones, where the low-hanging fruit as it is called yearns to be plucked. Getting the most bang for the buck, especially for a small country like ours, should be a no-brainer. Sadly, it doesn’t seem to be.

    There is quite a number of possible contenders.. The Franco-Indian solar initiative would be for example a very useful place to plop a big pile of money.**

    That does not at all mean that campaigns to reduce coal use or petrol use in New Zealand are meaningless. These are toxic chemical and the less we use of them, the better. Ones’ own backyard is a good place to start in this regard. But let’s no kid ourselves about why.

    * I have heard this said but don’t know that it is true, but it certainly seems plausible.

    ** One of the more worrying aspects of future emissions issues is the problem posed by African countries now on the verge of greatly increasing their economic activity but now with hardly any emissions at all. Putting them on a sustainable energy track “while there is still time” – this is me writing – seems a great idea. And of course, other big emitters including India need offsets and reductions that investment will pay much larger dividends than in New Zealand for any given amount of expenditure.

    • Framing 0.2% as globally insignificant and as reason to avoid action is intellectually lazy and dishonest.

      We should reduce our 0.2% contribution by the same general percentage reduction as every other producer of greenhouse gases. All pull together.

      A concept that isn’t too difficult to understand when you ditch the politically motivated mental gymnastics that Steve usees..

      • With all due respect Richard, it doesn’t seem to me that I am using any political motivation at all. I guess thinking is mental gymnastics but hey, that’s what thinking is. The boot is on the other foot.The way I see it, I am looking at the problem as it really is. All is not equal in this, as I have tried to make plain. Let’s do the most efficient thing. Present political posturing is “feel good” but doesn’t actually do good. I’m out of here. The field is yours!