Shaw has remained an interestingly divisive figure throughout his tenure as co-leader. He was respected by many on the right for his pragmatism and disliked by a core of the left for his perceived openness to compromise. All this, despite having led the Greens as they embraced a dramatically left-leaning US-style politics of identity and culture.
Regardless of his political palatability, Shaw will leave office with that rarest of political prizes – significant, positive, and effective policy change. He achieved this in the form of the sinking cap on New Zealand’s Emissions Trading Scheme (ETS). Possibly the greatest achievement in climate policy of our lifetime.
The ETS operates through Carbon Credits issued by the government. Each credit purchased entitles the user to emit one ton of CO2, or to sell on the credit. Companies can generate credits by removing carbon from the atmosphere.
Prior to Shaw’s intervention, there was no cap on how many credits the government could issue. This rendered the ETS functionally useless. If the government was concerned that total emissions would exceed the emissions budget (the number of credits released that year) they would simply release more. The lack of credit scarcity kept prices low and did little to induce behavioral change in emitters.
Shaw changed this. The introduction in 2020 of a decreasing cap on the number of credits released per year reinvigorated the ETS. A cap on the number of credits creates scarcity, causing credit prices to increase, as prices better reflect the value companies place on their ability to emit CO2. A continued decrease in the number of units means that the price will continue to rise, providing companies with a constant incentive to invent, invest, and alter their emissions-producing activities.
Not only this, but the legislation governing the ETS is strong enough that government attempts to tamper with the system have seen them brought before the courts.
Of course, there is still more work to be done. A cap on total emissions from the present day to net-zero needs to be implemented. The government would also do well to consider a carbon dividend.
Nonetheless Shaw’s contribution is remarkably impressive. A capped -ETS is elegant in its simplicity and practical in its adherence to market principles. Shaw should be proud of his achievement.
Max Salmon is a Research Intern at the New Zealand Initiative. He joins as a generalist, with interests in education, infrastructure, and energy. This article was first published HERE
The ETS operates through Carbon Credits issued by the government. Each credit purchased entitles the user to emit one ton of CO2, or to sell on the credit. Companies can generate credits by removing carbon from the atmosphere.
Prior to Shaw’s intervention, there was no cap on how many credits the government could issue. This rendered the ETS functionally useless. If the government was concerned that total emissions would exceed the emissions budget (the number of credits released that year) they would simply release more. The lack of credit scarcity kept prices low and did little to induce behavioral change in emitters.
Shaw changed this. The introduction in 2020 of a decreasing cap on the number of credits released per year reinvigorated the ETS. A cap on the number of credits creates scarcity, causing credit prices to increase, as prices better reflect the value companies place on their ability to emit CO2. A continued decrease in the number of units means that the price will continue to rise, providing companies with a constant incentive to invent, invest, and alter their emissions-producing activities.
Not only this, but the legislation governing the ETS is strong enough that government attempts to tamper with the system have seen them brought before the courts.
Of course, there is still more work to be done. A cap on total emissions from the present day to net-zero needs to be implemented. The government would also do well to consider a carbon dividend.
Nonetheless Shaw’s contribution is remarkably impressive. A capped -ETS is elegant in its simplicity and practical in its adherence to market principles. Shaw should be proud of his achievement.
Max Salmon is a Research Intern at the New Zealand Initiative. He joins as a generalist, with interests in education, infrastructure, and energy. This article was first published HERE
7 comments:
Let us hope that if Luxon tries to appoint Shaw as Climate Change Chair that Act and NZF strongly oppose replacing one alarmist with another one. As Dr Judith Curry says there is no climate emergency.
“There’s no emergency” – dissident climatologist Dr Judith Curry on climate change
https://www.youtube.com/watch?v=YBdmppcfixM&t=125s
In “The Wizard of Oz”, at one point Dorothy tells her dog that she has “a feeling we’re not in Kansas anymore”. She had been dropped in a strange new world that was crazier than anything she had ever imagined. Needless to say, many of us feel the exact same way. We’re not in the country that we grew up in anymore. Instead, we now live in a country that appears to be a cross between a really bad science fiction movie and a freak show. Sadly, the pace of change has now reached an exponential rate, and things will get even more insane during the years that are ahead of us.
Hang your head in shame Max Salmon. You are obviously a recent graduate of climate alarmism they teach at high school to believe in this nonsense. When Shaw was ever questioned for a rudimentary explanation on anthropological climate change he ducked faster than a pugilist. Shaw’s real legacy was to protect the greatest lie ever told costing NZ billions.
"Of course, there is still more work to be done. A cap on total emissions from the present day to net-zero needs to be implemented."
Sure! If you live in LaLa Land and want to cripple your economy.
For a research intern, you really need to broaden your scope and do more research, Max.
Appoint a geologist to the Climate Change Chair - they seem to be the only people that have any idea about the constant cycle of climate change and it's long term impact on the planet.
James Shaw first displayed his own personal lack of any moral compass in 2017, when Meteria Turei big noted herself as a benefit frauster and Shaw stood alongside her unapologetically arguing for her sainthood while other Green list MPs David Clendon and Kennedy Graham expressed their dismay over her public statements. Shaw then orchestrated their ejection from the party - like the true rat fink that he is - making certain that they could never return and challenge him in the future. James Shaw has gone on even greater lows, culminating in trying to minimise the transgressions of his shadow Justice Minister’s alleged shoplifting behaviour, doling out millions to an elite private school and creating a complete shambles of a census whilst Minister of Statistics. As someone else mentioned, capping Carbon Emissions Credits is a zero sum game that inevitably ends up costing the consumer the most, all to fix a hypothetical problem that James Shaw has made it his job to solve. Like Turei, will he eventually have to fall on his sword once exposed as a duplicitous creature whose only purpose was to serve his own interests in the long run. A true political animal if ever there was one. His real legacy is going to be his replacement, and imitator, Chloe the Dreamer.
Ditto for Carbon Zero nonsence . Uunfortunately Mr Luxon has yet to define his misplaced understanding of wishing all humans to die with adherence to his Carbon Zero narative. They die because the world food , transport, health and employment rely on fossil fuels to operate .
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