Thank goodness for climate change denier Senator Fielding of Australia.
Didn’t think you’d ever hear me say that, did you?
Senator Fielding is the one vote Rudd didn’t have yesterday to pass their “Carbon Reduction Plan” – or Emissions Trading Scheme in our language. And that is a good thing, because the proposal was so appallingly weak that it would not actually reduce carbon emissions, but would have given huge subsidies to the coal and other heavy industries.
The five Green senators aren’t having a bar of it – although they support reducing carbon emissions and emissions trading if it is set up right. Senator Fielding (Independent) opposed it in yesterday’s vote for the opposite reason – he thinks climate change is not caused by human activity, but probably the result of solar flares. Whatever. The important thing is the outcome.
Why should we care? Well, because the NZ Government is desperately keen to amend our law, passed last year, to “align” with the Australian scheme. That would see us:
- delaying the introduction of agriculture, possibly indefinitely;
- allocating the free credits for trade exposed industry on an intensity basis – ie the more you grow your emissions in the future, the bigger the subsidy you get. No incentive for growing low carbon industry there;
- capping the value of carbon units, initially at $10 a tonne – no incentive to do anything much there;
- prohibiting the sale of Australian units outside the country, so limiting the market to what Australian buyers are willing to pay.
- offsetting the effect on transport fuels by reducing other taxes, with the effect that there will be no effect on transport fuel prices, and so no change in behaviour. And their petrol is already cheaper than ours.
So the Greens here are pleased that for several months at least, there will be no Australian scheme to align with. We have a scheme in law now – it is not perfect, but it is much better than this.
It is possible that in October, when the Bill could be put up again, the Liberals will change their opposition and vote for it, in an even weaker state.
But by then it will be too late to get legislation through the NZ Parliament before the energy and industrial sector takes on liabilities under our existing law, on 1 January 2010.
The Government is in a real bind. No allocation plans have been developed for the energy sector, sorting out who will get free credits, and how many, allocated because their competitors overseas face no price on carbon. It is 10 months since the law was passed but officials appear to have stopped working on the complex allocation plans when the new government was elected, because John Key said he would put the ETS on hold while he developed amendments. Such a law is a long way off, supposing the Government can even get the numbers to pass it.
Allocation plans are not quick to get approved as they have to come to Parliament for scrutiny. In the meantime, time marches on and industries like cement, steel, aluminium, wood processing, Fonterra and others are looking at 100% liability for their emissions on 1 January because there are no allocation plans.
That cannot be allowed to happen, but it is not clear how the Government plans to stop it.