Friday, May 16, 2014

Tiny progress with our emissions trading scheme

Dear Hons Tim Groser & Jo Goodhew,

OK, this is an improvement. Well done. You have eliminated one of several ways that people make money with our emissions trading scheme (ETS) while doing nothing of value for the environment.
However, "money for nothing" will continue to undermine our ETS, with people receiving NZUs worth $3.95 each from the government for allowed emissions and then surrendering ERUs worth $0.17 each to cover their emissions. 82% of credits surrendered to cover NZ's greenhouse gas emissions in 2013 were ERUs. The low prices of imported "hot air" ERUs and CERs have lowered the price of NZUs to the point where our ETS is failing to change greenhouse gas emission or sequestration behaviour in NZ and we are not doing our fair share of climate change mitigation. Our ETS benefits speculators and nobody else.

Your policies are responsible for this situation.

In order to fix our ETS, I urge you to:

1) Disallow all imported carbon credits, particularly CERs and ERUs, within our ETS, and allow New Zealanders with CERS or ERUs to sell them back on the international market.
2) Stop grandfathering credits.
3) Cease random, "fiscally neutral" gifting from Government to selected companies and individuals.
4) Apply the ETS equally and fairly to all sectors, including agriculture.
5) Allow trading only between sequesterers and emitters (if you overpollute you pay someone else to clean up).
6) Manage our domestic NZU "currency" in a similar way to the Reserve Bank's management of our coinage. This could be achieved by setting reduction targets each year in response to NZU market conditions, requiring surrenders only for “over target” GHG emissions, and ensuring that annual targets stabilised the NZU price.

If you implemented these policies now, then I expect that our ETS would begin to be effective in 2-3 years time after the huge backlog of accumulated "money for nothing" NZUs in our carbon credit registry had worked its way out of the system.

Yours Sincerely,
Euan Mason