As long as we beat New Zealand

Gareth Renowden on the confused mess that is New Zealand's climate policy:

When the ETS was first launched, National supported it. Then they withdrew support for the legislation in the run-up to the election, but campaigned on keeping the basic ETS structure while tinkering with (also known as watering down) the settings. Post-election, to pacify Rodney and his pack of cranks, the ETS was to be put on hold while a select committee considered, amongst other things, whether a carbon tax might be better. Now, on the last day of this session, we learn they're not going to do that, and the legislation stands until amended.

If this seems like a government that doesn't know what it's doing, then I'm not the only one to notice.

Title from this song, with Andrew Denton in 1992:

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It's regrettable. NZ has a good environmental reputation (only partly-deserved), but the new government seems hell-bent on destroying it. They've scrapped (or 'put on hold') every bit of legislation designed to deal with climate change, and were also obstructionist at Poznan.

The Bush legacy lives on in John Key and Rodney Hide.

Just reread the post, and the key (hah!) bit I missed was
Now, on the last day of this session, we learn they're not going to do that, and the legislation stands until amended.

So now the ETS isn't on hold. Or is it? I expect to read something next week that turns it around yet again.

If the NZ government's intention was to confuse everyone, they've done a brilliant job.

I am so proud of my government...

The ETS in NZ as proposed by the Labour Govt was bad legislation with so many loopholes and passed under urgency before the election which they lost.
I think the people of NZ are more concerned about the economic future at present instead of the ETS, thanks to the Labour Govt. leaving the books in a mess.
The ETS is on hold, yay, does not mean they will not do it in the future, but it needs to be more balanced. Also, great to see Thermal Power is allowed again as well.

By Peter Johns (not verified) on 18 Dec 2008 #permalink

No political party (except the greens who have consistently advocated a simple carbon tax with revenue recycling) can take the high ground on addressing CC in NZ. Back in the 1990s I worked on a team under the Bolger national govt of the time to develop a carbon tax. When we has just about got that ready to go. The farmers revolted and it went on to hold. With the Labour Govt policy development went back to stratch and the shift to an ETS began. But to get it through the political hoops it evolved into something that was so flawed with grandfathered allocations and exemptions it would have been ineffective until such time it was completely reviewed (if that ever happened).

My preference was to put in a low carbon tax (no exemptions) and recycle the revenue into lowering income tax for those most affected by higher energy prices (low income) and also into R&D into GHG emission reduction measures.

Then gradually ramp up the rate with the view to transition to an fully comprehensive ETS in line with international practices and carbon prices.

However, we should have already started this back in the 1990s now when it happens there will be a sharp ramp up in cost at a time of economic difficulty, much more painful.

Doug

By Doug Clover (not verified) on 18 Dec 2008 #permalink

"If this seems like a government that doesn't know what it's doing, then I'm not the only one to notice." Valid point, but tell me: how does New Zealand differ from other countries in this respect?

Well, you could argue that NZ had - until the new government started repealing and reviewing legislation - a reasonably comprehensive set of price measures (the ETS), supported by a range of reasonably sensible regulatory mechanisms: a moratorium on new thermal generation, energy efficiency standards, a scheme to insulate older buildings. None of it perfect, but all interlocking to form a strategy on dealing with emissions.

We were, to some extent at least, ahead of the pack in that respect.

All now in tatters, with a new government that gives no impression of knowing what it's doing.

Gareth

Rather not caring, or perhaps caring only about short term economic issues.

The home insulation retrofit programme makes economic sense even in the absence of CC and rising energy costs.

NZ's housing stock is a disgrace adversely impacting on health. The health benefits alone are worth the social investment.

I am already beginning to despair at this government's lack of vision and ability to see the big picture.

Doug

Doug

By Doug Clover (not verified) on 19 Dec 2008 #permalink

Gareth, DC - why is a ETS required for natural acts of CO2 emissions? Industry man made of course. No tax is needed for emissions, it is just a utopian ideal of the left.

By Peter Johns (not verified) on 20 Dec 2008 #permalink

Peter Johns

Your message doesn't make sense. Is English a problem for you?

P.S. pricing externalities is good economics and results in more efficient markets (nothing left wing about that mate.

By Doug Clover (not verified) on 20 Dec 2008 #permalink

New Zealand has an entirely different emissions profile to Australia (mostly cows). It would therefore make some sense for us to join together in a common cap, maybe a Pacific carbon trading bloc, to share the risks and seek the lowest cost solutions. I think Garnaut made a similar suggestion.

On a somewhat separate matter, I've travelled around the NZ countryside a bit recently, and it is quite bizarre to me that the country enjoys a green reputation. Their land management practices are totally woeful, like the worst parts of rural Australia. A good 20 years behind the game. Weed infested, soil eroding, no native vegetation, really poor catchments.

Doug "(nothing left wing about that mate".

Well it depends where you're coming from.

Pricing an externality would imply the real world and the world described by the microeconomics 101 text book, chapter 1, page 1, are not exactly the same thing, and that's a pretty high hurdle for some people to get over.