Emissions trading scheme – credits, biodiversity and agriculture

Jeanette gave her second reading speech on the Emissions Trading Scheme last week and it’s worth pulling out a few quotes to discuss some of the technical details.  First let’s look at one of the changes the Greens made to the free credit allocations for trade exposed industries:

In a further amendment, the Minister must consider the extent to which firms are trade exposed, so that, if a firm is trade exposed for only part of its production, it will not be grandparented free credits for the whole of its production. I said in the first reading debate that I would work to get coal-seam methane included, because that was a completely unacceptable subsidy to the coal industry, which officials were proposing would never be remedied. We did that in the Finance and Expenditure Committee and that is now in the reported-back version of the bill.

That’s still not an ideal situation but it will create significantly more incentives for industries to move reduce their carbon emissions than the earlier version of the bill.

Protecting biodiversity was also, and remains a significant concern for the Greens in the legislation.  This is where the situation currently stands:

Like the Parliamentary Commissioner for the Environment, the Cawthron Institute’s report, and many environmentalists, we were concerned that the incentive to plant pines for credits might be at the expense of important New Zealand biodiversity, such as regenerating native forest or tussock land.

We wanted conditions in the Act and we were told that this is a matter for the Resource Management Act. So the Resource Management Act will fix it! The Government has committed to a national policy statement on biodiversity under the Resource Management Act with a gazetted timetable to achieve that. That will give needed protection to important areas of biodiversity in New Zealand.

Finally one of the debates around the scheme and agriculture has come from some in the industry saying that it is too hard to reduce emissions. That ignores significant opportunities, not just from changes to existing farming practices, but from potential innovative scientific fixes that now just need the research and technological investment to bring them to fruition:

The most important thing for agriculture will be where the research money goes in the meantime. We do not think it should all be poured down the single chemical channel of nitrification inhibitors. There is agreement that the other sustainable solutions that can reduce nitrous oxide from soils will be pursued at least equally. One of the emails we received when we called for public input on our decision was from someone saying: “I’ve been working for some time to set up a business where I’m going to produce wood from waste wood fuels to replace coal. If there is no price on carbon, this business will fail.? We need a price on carbon so that innovative solutions like this can be adopted throughout the country. The biggest risk is that we think this bill has fixed climate change. It has not. There is a great deal more we need to do, and the Green Party is committed to doing it.

11 Comments Posted

  1. Federated Farmers screams of pain regarding their inability to cope with competition from overseas farmers who are not ‘penalized’ by an ETS is a cry for protectionism from those who are firmly wedded to open markets when the going is in their favour. Do they offer to pay extra taxes when the going is good, like now – NO !

    It ignores many factors, protectionist in nature, which operate both in their favor and against them depending on which market you examine. If they have faith in their preferred economic model, the market, then let them be tested against against it without fear or favour.

    If Fonterra were to adopt my suggested model and become a green energy company, with farmers growing crops for biomass ( trees and greens), supplying Fonterra for energy production, they could have their cake and eat it. It would keep the balance of payments situation roughly balanced by my rough calculations, whilst reducing cattle numbers, and producing tonnes more Green energy not GHG’s.

    See flow chart of this model on http://bigblu-treehouse.blogspot.com/

    This ignores the ‘pastoral’ industry but this is shrinking, while the dairy boys & girls expand like there’s no tomorrow.

  2. At least we now see some solid arguments coming from the Greens (in public) perhaps after the horse has bolted.

    It seems to me that talk of electric cars is a bit ephemeral, a future development we have little influence over, whilst we allow the Primary Industries to escape the effects of ETS for goodness knows how many more years.

    A bit like Nero fiddling I say.

  3. BP – there is an NBR report to that effect. I’d like to look more closely into the validity of the claim before I make a comment. Not tonight though.

  4. Looks like Ngai Tahu want 100 million to cover ETS losses.

    Best take that figure off your insulation figure, Greens. Or the house building budget. I’m sure you have a spreadsheet somewhere. In fact, leave the column wide open. I’m sure other tribes will soon be feeling the pinch…..

  5. >>I’m potentially happy for electric cars to fit into that category

    Good. However, Sue Kedgley appears to be floundering around in the dark (ages) over this matter…. 🙂

  6. Ah sorry. I meant technologies that already existed, but needed to be brought to commercial reality. I’m potentially happy for electric cars to fit into that category (although they are still often a poor use of resources and energy compared to electric public transport). I’m less happy with the ‘Don’t worry, when we’ve finished with the earth we’ll just escape to Mars’, or ‘Don’t worry, we’ll just invent a machine to fix everything, humans always do,’ technological silver bullets.

  7. Jeez….monkey on typewriter. What I meant to say was:

    “Amazing. The “technological silver bullet? argument. We look forward to you accepting it when we use it in relation to, amongst other things, electric cars.

  8. >>That ignores significant opportunities, not just from changes to existing farming practices, but from potential innovative scientific fixes that now just need the research and technological investment to bring them to fruition

    Amazing. The “technological silver bullet” argument. We look forward to you accepting it we use it, as we have done in the past in relation to, amongst others, electric cars.

  9. Q: What does it mean when people in the Green party can seriously consider opposing climate legislation?

    A: That the climate legislation in question is so ineffective as to be worse then useless?
    B: That the party putting forward the legislation is somehow unfit to be seen to be supporting, even when they do something that advances core Green policy (albeit pathetically slowly).

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