Phil O’Reilly and John Carnegie of Business NZ believe New Zealand and Australia should able to buy and sell each other’s carbon credits. Australian carbon credits are created under the Carbon Farming Initiative and New Zealand carbon credits are created under our emission trading scheme. They believe New Zealand businesses should be allowed to import these Australian credits as soon as possible.
The problem with doing this is that this will give an unfair financial benefit to Australian farmers at the expense of our own. It would be akin to asking the All Blacks to take on the Wallabies with their rugby boot laces tied together. This is because under the carbon farming initiative Australian farmers do not pay for their livestock biological emissions. These are emissions of greenhouse gas which originate from the atmosphere and are just returning to it. They do not increase the atmospheric concentration of any greenhouse gas. The New Zealand farmer however under the ETS will have to pay for their biological emissions.
The Australian farmer gets off free on that and what is more can generate carbon credits by reducing emissions or avoiding an emission. For example a stand of mature bush, which does not sequester carbon, generates no credits for the New Zealand farmer, but Australian farmers can earn credits for not cutting it down because this avoids an emission.
Soil carbon is also available for the Australian farmer to claim credits if they undertake an activity which increases it because that is sequestering carbon. In addition they can earn credits for not undertaking an activity, such as cultivation, because it is avoiding an emission, namely soil carbon loss. None of these options are available to the New Zealand farmer.
It is beyond comprehension that New Zealand business would buy credits from an Australian farmer for doing exactly the same thing their New Zealand counterpart is doing but under our ETS the kiwi farmer is not able to receive credits. A scheme that allows New Zealand business to pay an Aussie farmer for not cutting down his bush, while kiwi farmers get nothing is not just a bad scheme, it is quite frankly unpatriotic.
What really hurts is that a New Zealand livestock farmer with stands of mature bush will have to pay for the purchase of credits that could have come from an Australian livestock farmer with stands of mature bush. Both farmers doing exactly the same thing environmentally, but under our ETS the New Zealand farmer is deemed to be an emitter needing to purchase carbon credits and under the carbon farming initiative the Australian farmer is deemed to be saving the planet in some way and able to sell carbon credits.
The problem is that these carbon credits are not all created equal. Many of them are created using smoke and mirror trickery or environmentally fraudulent carbon accounting. Even the credits that New Zealand has at its disposal because it is in credit under the Kyoto Protocol are only available because of a carbon accounting system which, if used for money, would see people locked up for fraud. New Zealand’s emissions are well up on 1990 levels and we should be in a deficit situation. But this deficit is converted into a healthy credit by ignoring all forestry removals in 1990, thus artificially inflating our 1990 position. Forestry removals are included when calculating our emissions in our commitment period of 2008 to 2012. So our gross emissions are up significantly, our net emissions are up significantly but when our net emissions for 2008 to 2012 are compared to our gross emissions of 1990 we are in credit. There is no environmental integrity or honesty in doing this but that is what the rules are, so we have credits we can sell.
That is the problem with these carbon credits; I am sure some of them genuinely result from the removal of carbon dioxide from the atmosphere, but so many of them do not. Even credits created in New Zealand by the forestry industry are of dubious environmental integrity. This is because the amount of carbon they are supposed to remove from the atmosphere is inflated because all forestry emissions of nitrous oxide are ignored and the massive losses in soil carbon that result when land is converted from pasture to forestry are also ignored. The result is that in these situations close to one third of the carbon dioxide our foresters are paid to remove from the atmosphere is not removed.
At least in the situation above it is a New Zealand forester who is ripping off the New Zealand motorist. Adopting a scheme whereby Australian farmers can rip off New Zealand farmers and motorists by selling us carbon credits of dubious integrity is pretty disgusting. New Zealand business may be salivating at the prospect of trading in these things, but there is no honour in this.