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Colin James on our ETS

  • April 15th, 2015

Our current ETS, allowing use of international credits to satisfy local obligations, is a brilliant scheme. It tells the world we are set up to pull our weight as soon as the big countries stop feigning action and make their carbon credits meaningful. When they do, ours will immediately increase in price.

At that point our scheme will bite. How hard it bites is dependent entirely on how genuine is the carbon rationing reflected in the price of internationally traded credits. When there is a scarcity of credits our economy will automatically be forced into incurring the emission reduction expense that otherwise would simply drive a foolish transfer of emitting activity toward the feigning countries if we lumbered ourselves with it now.

Until the others are genuine, any steps taken by us are not only damaging for no compensating benefit to the environment, they could actively make the world worse – like the dumb ethanol from corn and soybean laws, or as would be the case if our grass-based cow farming was transferred to a feedlot country like China.

So I’m a mite puzzled by the inernationalist sanctimony in Colin James’  column yesterday in the ODT.

To be fair, he attributes the sanctimony to others. But without mentioning the genius in our current scheme. Overall his tone of is of clear though gentle lashing of Ministers for not ‘doing more’.

.Meanwhile, a word on an international interaction in which many think that, unlike at Gallipoli, we do not do our full bit.  

 On Friday Tim Groser released the greenhouse gas (GHG) emissions inventory, showing a 23.1 per cent rise from 1990 to 2013, only partly due to the rise in population. A small fall in 2013 was the result of varying hydroelectricity lake levels and consequential recourse to thermal generation.

 Per capita emissions remain the fifth highest in the rich world.

 We will meet our 2020 target of a 5 per cent cut in net emissions from 1990 only because we have a lot of trees which absorb carbon dioxide.

 The bad news is that trees are being cut down faster than new plantings. Plantings have collapsed because slack rules for the emissions trading scheme (ETS) — two-for-one allocations to lighten big emitters’ burden coupled with near-open slather for purchases of foreign units, many of dubious climate-reducing quality — have generated such a low “carbon price” (around $6 a tonne) that foresters see no point in planting. They need about $15.

When the big 1990s plantings are cut down in the 2020s, total forests will be too small to offset emissions from agriculture, industry, oil, coal, transport and daily living.

 ….The UN asked countries to table the INDCs by March. Only China, the European Union, Mexico, Norway, Switzerland and the United States did. They set different targets and target dates, ways of getting there and explanations and justifications, with in some cases intentions to do better if others do.

…. So far ministers have mixed defensive assertiveness and assertive defensiveness in climate change policy: little can be done about animal methane, the world needs food and we are highly GHG-efficient; we already have a very high percentage of renewable-generated electricity; we have the ETS; we are doing research; and we are helping in the South Pacific. That is, we are doing our “fair share”, given our constraints.

 There is a stronger story to tell.

 Animal methane does not accumulate as carbon dioxide does. We have six methane-reduction research programmes and Groser has got 45 countries to back a global research programme.

 Agricultural emissions per unit of output have fallen — in dairy by 25 per cent since 1990. We can take that efficiency expertise abroad and are doing in the Chile. …

 We could greatly expand renewable electricity for transport (some ministers are interested) and low-grade heat for buildings. We could plant lots of trees, do more to drive energy efficiency in industry and buildings and fix the ETS, on which a discussion document is due soon.

 None need be at the economically crippling cost the cabinet fears.

How do you know Mr James? Industries and exports are crippled by marginal cost differences, not absolutes.

 Why bother? We all know the UN talks are a roundabout and the INDCs’ actions will not go near containing warming to the targeted 2 degrees.

 One: we trade on being a model global citizen. Two: there is a real possibility the Paris summit will, through “bottom-up” INDCs and “top-down” agreement on accounting and other rules, set a framework for future negotiations.

 If so, then the next summit (say, 2025) will be an upgrade of 2015 to fit new realities and capacities, including already rapid technological advances, not the past five years squabble over fundamentals.

 Incremental change doesn’t give scope for jingoism. But it might enable a future cabinet to be more inventive.

But only when it would not be a stupid gesture, a loony lone charge over the top yelling to cynical countries sniggering in the trenches ‘follow me’. When we charge it should be after we see the big emitters on their way. Until then, our ETS shows absolute sincerity and commitment, provided it will be positive, not negative.


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