… with the first year of the five-year commitment period under the Kyoto protocol almost over, square one is looking increasingly untenable. It has also become a rather expensive piece of real estate. New Zealand is the only country in the world to have fully elaborated both a carbon tax and an emissions trading scheme and implemented neither. That takes some doing.

He goes on to criticise Labour for failing to get a cross party consensus, and National for backing away from a cross party consensus when Labour moved towards their emissions trading policy. He also chides the Greens for discounting National in the lead up to the election.  The Greens offered before the election to sit down with National and work on fixing up the ETS, since a number of the objections in National’s minority report the Greens agreed with and were already trying to negotiate to fix. Alas, John Key refused to discuss the issue. I am pretty confident that the offer still stands, John.

Most striking in the article  is Upton’s criticism of ACT and the select committee.

What fresh insights can a select committee of New Zealand politicians add to a subject that has been exhaustively canvassed elsewhere? Anyone who has studied the issue in good faith knows that there are no certainties and that it is a risk management issue. Picking holes in computer models or climate data is a path to nowhere and would make New Zealand a laughing stock.

I couldn’t have said it better. Oh wait. I already have said it. Many times. So has Jeanette. Good on you Upton. Pull us all up on it and tell us all to pull finger. Sage advice. The risks of inaction are too great. Too great for the environment, for society and for the economy. Too great to risk becoming the laughing stock at Poznan, or Copenhagen for that matter.

Why would a “mainstream” party that campaigned on an ETS – but a different one – set up a select committee enquiry into maybe preferring a carbon tax?

What does Key mean when he says the ETS will be “put on hold” when most of it won’t be operational for more than a year anyway?

Why would a government that has set a target of reducing greenhouse emissions 50% below 1990 levels by 2050, oppose and dismantle every measure that could help achieve that, while at the same time reviewing whether there should even be a pricing signal?

Why would a government that wants to be taken seriously internationally, on the eve of the next climate change talks, set up a committee of politicians to review whether the scientists of the IPCC, the Royal Society and NASA, etc., know what they are talking about, or whether an alternative view is “right”?

Why would a government that aims primarily at economic growth and positions itself as business friendly create such policy uncertainty that international investors withdraw from New Zealand?

Most of these bizarre situations can be explained by the transition from opposition to minority government.

Key has set up a carefully balanced government where he can go as far to the right as he wants and justify it as “Act made me do it”. But he doesn’t have to go an inch further than he is comfortable with – “sorry Rodney, Maori Party won’t go there”.

It will be a true National government, able to do pretty much what it wants.

So Rodney’s posturing about scrapping the ETS was just a distraction and a nuisance during government formation. “You want to scrap the ETS Rodney? Let’s put that to the select committee. You want to review the science? Good idea. They can do that too. You think a carbon tax would be better? Fine – let them consider that.”

So Rodney calms down and the government is formed. The test will be when the chair of the committee arrives with a draft terms of reference, and Act has only one vote on the all-party committee. What that will really tell us is whether National is seriously committed to major delay. Considering a carbon tax and reviewing the science as well as considering National’s proposed amendments to the Act would be a huge job. It would take well beyond 2009. Meanwhile taxpayers are covering the cost of 100% of our emissions. Oh – but high income earners will be paying less tax.

Of course, Act doesn’t really want a carbon tax. Neither does the Business Round Table (BRT) which has been advocating it. But it gives them three advantages:

• more delay – so there is no price for as long as possible;
• if there is a carbon tax, it will be low, and cause a huge political fight whenever a government tries to raise it. The BRT is talking of $5-10/tonne, while the international carbon price for quality units is around $30-40.
• A carbon tax can be repealed as soon as there are the numbers in the House. An ETS creates property rights and cannot easily be done away with.

Under these conditions it’s not surprising that the Greens are not leaping at the chance to go there. Also, trying to apply it to agriculture and providing assistance for industries competing internationally with firms with no carbon price create the same problems as with an ETS.

I can’t believe that Key doesn’t understand that the only part of the ETS that is operational before 2010 is forestry, and that to “put the ETS on hold” either means nothing at all, or it means taking away the credits for planting over this last winter, which foresters are entitled to expect under the legislation, and taking away the deforestation penalty. This would lead to a huge deforestation this summer for conversion to dairying – exactly what Nick Smith endlessly criticised Labour for during 2007. To “put on hold” the ETS would require legislation before Christmas to amend the starting date for forestry – with all the international derision and challenge in Parliament. My pick is it was a figure of speech to keep Rodney happy.

Rumour has it that when Key complained about the air travel emissions tax in the UK, he was told to pull his head in and get his own house in order carbon-wise before he became a laughing stock internationally. He may be finding the hard way that sound bites that go down well with the uninformed on the campaign trail raise eyebrows in informed circles around the world and are not so simple to implement.

It must have been embarrassing when Nick Smith announced the cancelling of the green homes insulation fund (negotiated by the Green Party as part of the ETS agreement) and Key was announcing infrastructure spending to keep jobs and businesses afloat during an economic crisis, that Brian Easton was saying on radio that the home insulation fund was one of the best ways to keep jobs going because it could be done fast with little capital and only a very short training period. So should we expect an amendment to the ETS legislation, which has cemented the fund in law, to remove that clause? Will it be called the “ETS (keeping NZ homes cold and damp) Amendment Bill? Will it be introduced before Christmas? I look forward to the debate.

It must be embarrassing that investors ready to build biofuel plants making fuel from wastes and low value by-products are putting plans on hold because the Biofuel Act may be repealed.

It must be embarrassing that the EcoSecurities Group, one of the world’s largest, most reputable carbon trading companies has cancelled its plans to set up in NZ because there is uncertainty over whether the ETS will proceed.

It must be embarrassing for Gerry Brownlee to learn that the so-called ban on incandescent lights, which he campaigned to get rid of, is actually an efficiency standard for lighting just as we have for dozens of home appliances; that the appliance efficiency programme has saved households $148 million on their power bills over 7 years; and that some incandescents, as well as halogens and compact fluorescents will all meet the standard. It must be worse to find that without that standard, many of the best quality lights will not come into NZ because our market is too small if most people are still buying crap. Woops, market doesn’t always work after all.

He will learn similar embarrassing facts about what the showerhead issue was actually all about when he is responsible for cancelling a hot water efficiency standard for new homes.

So the interesting question, which I intend to ask in the House at some stage, is how does National intend to meet its target of 50% by 2050 with no investment in home insulation; no regulations for energy efficiency; no waste-to-biofuel projects; presumably no economy standards for vehicles coming into the country (announced in the Energy Efficiency and Conservation Strategy but not yet legislated); transport investment hugely favouring roads over public transport; and an investment strike in new green technology because of the uncertainty over whether there will be an adequate price on carbon?

Sounds like an interesting term ahead.

Specialist news service Carbon News this morning reports broker Nigel Brunel, of OMF Financial, as saying New Zealand is “a bit of a joke in Europe at the moment” following the National-Act agreement to suspend the emissions trading scheme.

“This was New Zealand’s opportunity to reinvent its financial markets by being the Asian centre of the carbon trade.”

But this week’s announcement that the incoming government will put the ETS on hold pending a review that will go as far as considering a carbon tax instead of an ETS and will re-examine the validity of the science behind climate change, has jeopardised everything, Brunel says.

“We have just fallen off the radar in Europe,” he said. “They are saying ‘all you do is talk. You’ve been talking since 1992. You are all talk and no action. You maintain that you are so clean and green and try to be leaders and all you do is nothing. You make a decision and then you change your minds. How can we do business with people like that? We can’t take you seriously’.”

Well, I confess that I have never taken Rodney Hide very seriously, particularly when it comes to his science.  Europe is into its fourth year of emissions trading. Claims of New Zealand leadership from National and Act during the campaign were fallacious.

All I can say is that I am looking forward to the blow torch of lobbyists coming onto National and Act, hard and fast. Oh, and the Maori party and UF too. They stood on the sidelines and threw stones while the rest of parliament got on with the challenging work of coming up with an ETS agreement that could get a majority in parliament. Even though it was our second choice, we Greens rolled up our sleeves and engaged with the real work.

Now John and Rodney have re-opened Pandora’s box and there will be hell to pay as the lobby groups from all sides pony up the big cash and the big guns. Meanwhile, the very allies and trading partners that National and Act say we should emulate are actively putting in place their own schemes. And we wonder why we look the fools on the international stage. Bad timing boys!