US vs NZ Climate Policy

Big spend-up prolongs carbon party


How much practical difference for climate change is there between the United States’ withdrawal, ask Alan Mark and Dugald MacTavish.

The Government recently announced its decision to pay $1.4billion annually over 10 years to buy carbon credits from overseas carbon markets to fulfil our obligations to the Paris Climate Accord.

This feels reminiscent of the $200million spent on phoney “hot air” Russian and Ukrainian credits the Morgan Foundation exposed last year, as an alternative to initiating effective mitigation measures here. This is short-sighted and reprobate, representing a massive subsidy to agriculture, and risks leaving our industries seriously lagging and exposed to rising carbon prices in the transition to a sustainable economy.

New Zealand is reviewing the Emissions Trading Scheme (ETS), which is the Government’s principal policy response to meet its greenhouse gas emissions reduction targets committed to in the 2015 Paris Agreement. The Wise Response Society attended the two rounds of public discussions on the ETS in Dunedin. The second meeting, organised by Ministry for the Environment last March, was little short of a sham. There was no public advertising of the meeting so, not surprisingly, fewer than 10 members of the public attended, outnumbered by officials, and the public was told the meeting was to be explanatory only.

Key issues and flaws with the ETS as proposed at the meeting were:

  • The targets the ETS set to meet (New Zealand’s “intended nationally determined contributions”: INDC), are too weak and insufficient to play New Zealand’s fair part in retaining global warming below a 2degC average increase on pre-industrial levels.
  • Exemptions for agriculture (responsible for 50% of New Zealand’s emissions) and trade-exposed industries further compromise the ETS – all emissions must be included to allow the market to adjust to the new imperative.
  • Relying heavily on overseas unit offsets and local forestry (especially if it will eventually become a net emitter) is shonky and of little value unless accompanied by a serious national reductions programme.
  • Our assumptions and values shape our patterns of behaviour. So above all we need a public consultation process which considers these before setting what we believe are just and responsible emissions goals. Supporting policies need to include:
  • A sinking lid on permissible emissions to reach zero net emissions at least by 2050.
  • A fiscally neutral carbon levy, imposed at points of import and emission, with all dividends returned equally to citizens to incentivise emission reductions.
  • Annual reporting on CO2 reductions in relation to milestones and an agreed budget.
  • Any other revenues from the ETS be directed to hasten the transition to renewable energy and low-emissions land use.
  • The need to capture not just industry but all citizens, and promote behaviour change for practical action.

After exceeding 2degC, feedback effects are highly likely to make the situation irretrievable: the temperature will just keep rising irrespective of action taken, and continuation of historical trends will put us over this line by about 2030.

The nature of the threat already means we are at extreme risk. Climate stability is potentially already beyond retrieval. Accordingly, there is no longer the luxury for wealthy countries like New Zealand – no matter how small – to freeload the system in any way.

The ministry presentation outlined the many uncertainties in developing an effective domestic and international emissions market. Given the above concerns, and that we have one chance to avoid planetary overheat, the Wise Response Society considers a more directive, outcome-focused process is required: failure must not be an option.

Once the budget limit is set, market mechanisms may be used to allocate between emitters, but will not provide an optimum outcome without accompanying interventions and complementary methods like carbon efficiency regulations.

We acknowledged the ministry brief may exclude consideration of some of the above issues. However, an extraordinary situation requires an extraordinary response.

We thus urged the ministry to recommend whatever steps necessary to facilitate a stable climate. And as the government department charged with advising the public and the Government on a responsible position to deal with climate change, the ministry must greatly increase its publicity on this issue.

Given the ETS review is ongoing, it seems premature for the Government to state the amount of overseas credits needed. In essence, why should we feel we have the right to prolong our profligate carbon-rich lifestyle by buying huge quantities of overseas carbon credits, at great cost to the taxpayer, while other countries shoulder our carbon debt?

Like the US withdrawal from the Paris Agreement, this policy will be highly detrimental to our international standing. Inevitably we, but particularly future generations, will eventually pay a much higher price, financially, socially, politically and environmentally, to our country’s enduring shame.

Sir Alan Mark is chairman and Dugald MacTavish secretary of the Wise Response Society.