Prime Minister John Key says that he misses Nick Smith’s experience on environmental issues. Greenpeace would certainly welcome his return to his portfolio, their spokesman Nathan Argent was singing his praises to the NBR.
Greenpeace might be members of the Nick Smith fan club but there are not many others. I had some sympathy with him after John Key dumped on him following his comparative misdemeanour regarding Bronwyn Pullar but I for one was really glad to see him out of the Climate Change portfolio. According to the NBR “many in business sighed with relief when one of the ETS greatest advocates was removed from both Environment and Climate Change portfolios”.
I was hoping Hekia Parata might get the job, now a lame duck in the education portfolio she would be well suited to Climate Change. It is one Ministry where having a lame duck Minister would benefit the country.
However we have Groser. I have communicated with him many times and he has acknowledged that the current way of dealing with livestock emissions is inappropriate. It is also encouraging that he said “no other country in the world had put a carbon price on agricultural emissions. “We are not going to be the first to do this.”
John Key also changed his previous stance that “farmers must do their fair share” to “the Government would not put New Zealand farmers at a “complete disadvantage” to others around the world”.
Promising stuff, but their actions have not helped. Biological emissions were due to enter the ETS on Jan 1st 2015 after a review in 2014. This review has now been delayed until 2015 so the earliest bio emissions will come in is possibly 2016. While a delay of a year is not a bad thing, it would on balance have been better to have the review under a National led govt. Delaying the review a year will help placate the Blue/Green voter who wants faster progress towards ruining the economy with the ETS. This is because the Govt will not have to make any policy announcements in regard to the ETS obligations of business and farmers prior to the election. By delaying the review a year they have effectively taken it off the election agenda which should help its re-election chances. If it does not help however, the review will be carried out under a Labour/Green govt. Farmers usually do quite well under a Labour govt but I don’t think that is going to be the case this time, especially with Russel Norman having 15 or 20 MP’s. I would rather have the review in 2014.
The Government is drafting legislation which will be put to a select committee so we will get another bite at the cherry. Below are the key changes they propose making. They have backed down on capping international units at the insistence of the ACT Party. The Govt had been concerned that by buying international units offshore as opposed to locally that there was a loss to the NZ economy. ACT said that this is nonsense because under the ETS it follows that any emitter who buys Units is exchanging value for value rather than losing welfare. The alternative reading is that the entire scheme involves arbitrary wealth transfers of little or no benefit. (Which it really is, no more, no less. A bit of a tongue in cheek dig by John Banks at Tim Groser’s ETS I think)
Anyway we will get another chance at the select committee to get some more changes specifically around livestock emissions and also a chance to further remind Tim Groser and the other politicians who support the ETS, what folly they pursue.
The key changes are:
- to extend transitional measures designed to reduce the initial cost impacts of the scheme beyond 2012. In particular, these will extend the ability of many of those with ETS obligations to surrender one emissions unit for every two tonnes of emissions (the ‘one for two’). In addition, participants will also have the choice to meet their obligations by paying the Government $25 per tonne of emissions (the fixed price option)
- to defer the start date for surrender obligations for biological emissions from agriculture, pending a review in 2015
- to introduce ‘offsetting’ as an option for pre-1990 forests, giving forest landowners the flexibility to convert their land to a better use, but avoid ETS deforestation costs by planting a carbon equivalent area of forest elsewhere
- pre-1990 landowners will continue to receive their allocation of emissions units in full, unless they take up offsetting. In recognition of the benefits offered by offsetting, pre-1990 forest landowners who take up offsetting will need to return the second tranche of this allocation
- to introduce a power to allow the Government to increase the supply of New Zealand Units (NZUs, the primary emissions unit used within the ETS) through an auction, within an overall cap on the number of NZUs auctioned and allocated. This will help to ensure that ETS participants do not need to fund more emissions reductions in other countries than New Zealand needs to in order to meet its international obligations or domestic targets
- not to introduce a new power that specifically allows for quantitative restrictions on the number of international emissions units that can be surrendered by those with ETS obligations. This will ensure that the carbon prices faced by ETS participants continue to reflect international prices.
In addition, the Government confirmed its previous “in principle” decisions in relation to the synthetic greenhouse gas sector. The Governement is also proposing a number of smaller, more technical changes to improve the operation of the ETS.
Next steps
Further information on these changes including detailed sector-specific factsheets will be made available very soon.
An NZ ETS amendment Bill will be tabled in the House and referred to a select committee in due course.
I will keep you posted on this
Robin