Where to begin? This
is a complicated topic, and I can see that Labour has good intentions. I have given up on the National Party. If I hear Tim Groser (Minister for Climate
Change Issues) say one more time that New Zealand is one of the few countries
with a price on carbon then I am gonna scream.
New Zealand’s price on carbon is 11 cents per tonne for most of us, and
some of us are rewarded for polluting.
Yes, that’s right, we pay people for emitting greenhouse gases. We are an international pariah. We have never led the pack, and we are one of
the world’s worst polluters. Labour’s policy, however well-meant, will
make us even worse still.
Firstly, let’s examine the stats. We increased our net greenhouse gas emissions
by 111% since 1990. Yes, we met our weak
Kyoto commitment to get our net
emissions between 2008 and 2012 to the level of our gross emissions in 1990. Our
gross emissions increased by 22%. This
all clear in Tim Groser’s report to the United Nations Framework Convention onClimate Change. We received a fossil
award in 2012 for our shabby performance. We are the fifth worst polluters per
capita, at 18 tonnes of CO2-e/person. We have never “led the pack” as Tim Groser
asserts. We are tail-end Charlies. This is embarrassing and shameful.
So, how do we pay people to pollute? All polluting industries except farming are
required to submit credits each year to account for their pollution. We give “trade exposed” polluting industries
our domestic carbon credits, New Zealand Units (NZUs), equivalent to 90% of their
pollution. It’s called “grandfathering”, and the idea is that they only need to
find an extra 10% to cover all their pollution.
If they reduced their pollution by more than 10% then they could have
some credits to sell to other polluters.
Sounds OK so far, doesn’t it? It’s
not OK. Our current government has
chosen, as a matter of policy, not to restrict imports of foreign carbon credits. Have a look at the current price of credits
in New Zealand on CommTrade. See the “ERU”
price at 11 cents (September 2nd)?
Those are “hot air” credits that represent no change in behaviour in response
to climate change. They are fraudulent,
as detailed in my previous blogs. Almost
all surrenders to our credit registry from polluters in 2013 were ERUs. Note that the NZU price is $4.35. This means that “trade exposed” industries
are gifted, by you and I, NZUs worth $4.35 for 90% of their pollution, and they
can submit ERUs worth 11 cents to cover their pollution and make a $4.24
windfall for polluting. This is worth
millions of dollars to them and it’s one of the reasons why our Emissions
Trading Scheme (ETS), the “heavy lifter” and central plank of our climate
change policy according to Tim Groser, is an utter failure so far. See my previous blogs for the other reasons
the ETS is failing and also how we could fix it.
Labour’s policy would make things worse. Farming currently emits roughly half of our
annual greenhouse gas emissions of approximately 75 million tonnes of CO2-e,
but its principal emissions are not covered by the ETS. Labour proposes to
bring farming into the ETS as a “trade exposed” participant, with 90% grandfathering,
and also require 50% of credit surrenders to be NZUs. This means that the other 50% could be "hot air" ERUs, and farmers would get a reward for polluting of more than $150 million
per year (the difference in price between their gifted NZUs and the ERUs they
would be allowed to submit).
Our ETS could work, and I’ve set out how to make it work in previous blogs, but sadly Labour’s current policy will just make things worse. Yeah, I let the Labour Party know about this when its policy first emerged. It hasn’t responded.
UPDATE: Moana Mackey, Labour's Spokesperson on Climate Change, is going to talk with me about this.
