For example, the scheme caps net emissions. If emissions go down in one sector, another sector's emitters can buy the slightly-cheaper NZUs and use them. The only thing that reduces net emissions in the covered sector is government auctioning or allocating fewer units.
And that the scheme wasn't designed by idiots. You can get credits for growing trees. But if you cut down the trees, or if the forest burns down, there are obligations: surrender the carbon credits or replant to sequester an equivalent amount of carbon.
If the scheme didn't require surrendering credits if the forest burned down, it would be a pretty stupid design.
MPI explains it in really simple language.
If the scheme didn't require surrendering credits if the forest burned down, it would be a pretty stupid design.
MPI explains it in really simple language.
Natural disasters and other accidental events can damage forest land. Where this damage fells, burns, kills, uproots, or destroys the forest, the forest is treated as cleared in the ETS. This can result in a need to pay (surrender) New Zealand Units (NZUs or units) for the decrease in stored carbon.
From 2023, you can apply to pause carbon accounting if such an event damages your forest. This is called a "temporary adverse event suspension". If your application is approved, you won’t need to pay units for the decrease in stored carbon.
This pause will last until your forest:
- is re-established (replanted or regenerated), and
- achieves the same level of carbon storage as it had before the event.
The former chief science advisor for the Ministry of Transport says the current government isn’t even pretending to try to reduce carbon emissions from transport.
For the past six and a half years Simon Kingham, professor of Human Geography at Canterbury University’s School of Earth and Environment, was seconded two days a week to the Ministry of Transport as chief science advisor, to advise on the evidence base of government policy.
Kingham says the coalition government is taking a completely different approach to the former Labour-led government. “The previous government was working to reduce transport emissions. The current government is not even pretending to try.”
There is a long list of transport emissions reduction policies that the coalition government has binned. “They’ve cut back the Clean Car Discount, reduced the Road User Charges exemption for EVs, they’re winding back the Clean Car Standard, reducing funding for public transport, reducing incentives for walking and cycling, they’re building more roads which increases emissions, they’re encouraging density but also encouraging sprawl, which induces demand."
He continues:
The government seems to be focussing more on net emissions and offsetting, Kingham says. But that’s not a straightforward solution. “If the emissions reductions are not coming from transport or agriculture that puts a lot of pressure on tree planting.”
While the government issues carbon credits for tree planting, we don’t know if that sequestration is necessarily durable, Kingham says. “Do they get to keep the carbon credits if the forests burn down? As well as tree planting there’s talk of biofuels. That all adds up to a lot of land that’s going to be used and I don’t know if anyone has thought through the implications of that.”
While relying on the Emissions Trading Scheme might work to decarbonise other sectors, Kingham says it won’t work for transport. “The ETS is not going to deliver reductions in transport because the price it would have to go to is politically unpalatable. You’d have to add a dollar to the price of petrol and no-one is going to want to do that.”One nice feature of the carbon price is that it tells us where emission reductions are most cost-effective. If one sector won't decarbonise much at a carbon price of less than $100, that tells us that there are lots of other ways of reducing net emissions for less than $100/tonne.
But it could be a fair critique to want transport planning to be making its best guesses as to what people will want as transport options when the carbon price rises to $100 or $150/tonne.
Anyway, it's always fun to gauge understanding of the ETS.
I'd always counted things like the clean car discount as pretending to try to reduce emissions.
Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was first published HERE
3 comments:
I'd always counted things like the clean car discount as giving money to the already well off who want to pretend they care. In between overseas trips a extending the pool.
The whole ETS seems to me as nothing more than a virtue-signalling exercise, given NZ's low amount of emissions in global context. Specifically comparing NZ 'business as usual' between now and 2100 and alternative case if we were to be net zero right now, atmospheric CO2 levels would either be 0.0xx% on 1/1/2100 or exactly the same level at 21/1/2100 (three weeks later). Has the NZ Initiative ever calculated the current cost of the ETS on per household basis per month? And would anyone out there offer an opinion as to whether such cost (even at today's ETS values) would deliver value for money over the 76 years? And BTW does anyone know where all that money goes?
As for propeller heads bleating about losing cushy fake consulting contracts, boo hoo!
And he is a Professor and a Chief Science Advisor?! No wonder so-called “experts” now have a credibility problem.
Yes, many people have pointed out the huge problem with availability of land for forests and biofuel farms. Just as many people have pointed out the huge problems with nearly all currently proposed actions to mitigate climate change.
The fundamental problem with the entire UN led project is that they’ve put the cart before the horse, ie they’ve adopted the solutions before establishing beyond reasonable doubt what the problem is. The science will catch up eventually, as it always does. Unfortunately this will cause lots of needless human suffering in the meantime.
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