A re-elected Labour Party would give the Climate Change Commission the authority to set limits and prices in the emissions trading scheme independent of the Government.
It comes after a TVNZ–Verian Poll found almost 70% of New Zealanders said they would be unwilling to pay higher petrol and electricity prices to stop climate change.
The emissions trading scheme effectively acts as a carbon tax. It makes most businesses buy credits which permit them to release greenhouse gasses into the atmosphere.
Those businesses pass on those costs to consumers in the form of higher prices.
Consumers are indirectly paying this tax when they buy petrol at the pump, milk in the supermarket, or use energy generated in a coal fired power plant.
When TVNZ showed the poll results to Grant Robertson and Nicola Willis, during a televised debate, both finance spokespeople said they were still committed to lifting the carbon tax.
“The reality is that there will be a higher carbon price whether a Labour or a National government is re-elected,” Willis said.
National has planned to use the revenue earned from the emission trading scheme to partly fund its tax cuts and therefore needs the price to remain at a reasonable level.
Robertson said: “Yes, the ETS price will rise over time, absolutely, because it needs to.”
But in December 2022, the Labour cabinet was spooked by the prospect of lifting the carbon price during a cost-of-living crisis and rejected the Climate Commission recommendations.
This was the first in a series of events that collapsed the carbon price and resulted in three failed auctions.
A group of activist lawyers successfully sought a judicial review and forced Cabinet to remake the decision in line with the county’s climate commitments.
Now, Labour has decided the Climate Change Commission should be allowed to set the prices and amount of carbon credits made available in each auction, without Government input.
This is similar to how the Reserve Bank functions. Most central banks were made independent in the late 20th century after political interference got in the way of inflation control.
Lifting interest rates can be deeply unpopular with voters and so elected officials tend to be biased towards looser monetary policy. This can lead to inflation being left to run wild.
Having an independent central bank prevents politicians from meddling in monetary policy and allows interest rates to be lifted regardless of public sentiment.
This has occurred in New Zealand this year, with the RBNZ explicitly engineering a recession during an election year as a way to quell high inflation.
Some have suggested that elected officials will also need to delegate climate controls to an independent body, as the costs of containing global warming could be politically unpopular.
Both the Green Party and The Opportunities Party have been running on this policy, but Labour had not committed to it until the release of its Climate Manifesto on Monday.
The manifesto also promised to create a Minister for Just Transitions who would be responsible for helping communities adapt to a low-emissions world.
Labour has also committed to setting new climate targets that would aim for gross carbon reductions and not just rely on offsets to achieve net zero.
Climate Commission chair Rod Carr (pictured above) said New Zealand needed to ensure it was reducing emissions at their source as much as possible.
“Storing carbon should be focused on offsetting emissions from activities that are really hard to decarbonise,” he said in April, earlier this year.
34 Comments
COMPLETELY ABSURD. - you couldn’t make it up.
“National has planned to use the revenue earned from the emission trading scheme to partly fund its tax cuts and therefore needs the price to remain at a reasonable level.”
The ETS should be hypothecated (ring fenced) and organisations forced to bid for the funding based on a benefit cost assessment of the carbon reductions they are proposing to generate.
It should be hypothecated for the same reason fuel excise tax is hypothecated.
Its collected to upgrade and maintain the transport system.
It would be absurd to collect fuel excise tax and return it to motorists and let the transport system fall to pieces.
Same for the ETS. While it is mainly a price signal, the revenue is best spent reducing emissions which is in NZ Incs best interests from a cost benefit perspective. Otherwise the ETS will need to climb even higher making the economy and everyone even worse off.
There is no dividend to be had because NZ is not going to make its Paris Agreement targets. The Government will likely have to spend billions of dollars buying credits from an overseas source, effectively paying someone else to offset our emissions for us. It would presumably cost far less to do the emissions reductions and offsetting here, hopefully stimulating future investment in the economy. Both major parties are ignoring the massive future liabilities.
There is no dividend because there is no "benefit".
"The achievement by a party of its NDCs is not a legally binding obligation."
https://www.c2es.org/content/paris-climate-agreement-qa/
"Not a single G20 country is in line with the Paris Agreement on climate, analysis shows"
https://edition.cnn.com/2021/09/15/world/climate-pledges-insufficient-c…
"Impacts of Emissions Reduction Proposals for COP21
Assuming the proposed cuts are extended through 2100 but not deepened further, they result in about 0.2°C less warming by the end of the century."
https://globalchange.mit.edu/publications/signature/2015-energy-and-cli…
profile,
I agree with you. It is fortunate that our NDC is not legally binding as it could be up to $30bn and after 2030, the clock would start ticking again.
On the global methane pledges, the estimated effect on global warming is 0.2/3% by 2050 I believe, but at what cost?
I would put ETS credits into the same investment category as Dogecoin and NFTs right now. No "price" is being found because the people who are supposed to be market participants don't actually know what the rules will look like and there is no fair price setting mechanism. It's a completely shambles and auctions are a joke.
Indeed. The idea of setting up a whole new Commissioner when we already have a Parliamentary Commissioner for the Environment (an Officer of Parliament, just like the Ombudsman and the Auditor General) was wasteful and dumb from the start.
It all comes back to the Zero Carbon Act being not-fit-for-purpose.
solar - you are away back in the 'environment' days; reminds me of 30-40 years ago.
Sorry, but that's just wrong. You could do worse than doing some homework: economic planning? Sigh...
It's ALL about energy flows; life, activities, so-called economies - you're away back where Parker is, in fact, maybe you need to see this:
https://nz.video.search.yahoo.com/search/video?fr=mcafee&ei=UTF-8&p=cla…
or just search: Clarke and Dawe, the front fell off
Our beyond the environment...
Thanks, you beat me to it! :-).
Always said, if we just solve our water/nitrate and other pollution problems (including the restoration of wetlands using the PWA), that alone would likely meet our decarbonisation targets.
They would need a significant uplift in modelling capability.
The electricity models for example understated hydro capacity by around 527mw (around an asset the size of benmore) and have overstated the cusum co2 emissions of geothermal 23-30 by around 3 million tons.
What's these hydro capacity models you talk of? Where can a decent summary be found? NZ seems in a strong position. The EROEI on direct drive solar seems near self replacing. Matched with our hydro batteries should give NZ a competitive advantage. Whether the consent conditions and industry structure allow that to happen is a different matter. Best overview I have found of what we face here:
https://www.newindianexpress.com/web-only/2023/jun/14/energy-destinies-…
Its a series of 8 articles by Satyajit Das, an Australian economist. A long read.
No energy, no economy. Less energy, less economy. And we are at, or past, the peak flow-rate of the fossil-energy stock.
So your 'economy' (which is just energy being applied to parts of the planet, then us consuming then discarding them) is doomed to reduce. Always was; get used to it.
We've been at peak fossil fuel for forty - fifty years. The only thing that stops the world increasing its use of fossil fuel is barriers to opening more wells / mines. As has been seen in Australia, the shift to renewables, which are expensive, unreliable and harmful to the environment isn't moving the dial on the need for oil and coal. It is, however, contributing to an energy crisis, which is feeding the cost of living crisis.
No.
We have burned more in the last 30 years, that all that went before. Vhttps://ieep.eu/news/more-than-half-of-all-co2-emissions-since-1751-emi…
And we currently go through 100,000,000 barrels PER DAY. Yet discoveries peaked in 1964 (the FF industry tries to fudge this via 'proven reserves').
Peak flow of Light Sweet Crude was 2005/6. Peak all-liquids looks like 2018 - if you can call kerogen et al 'oil'. I call them low-energy high-desperation remaining options.
But where we agree is that ex fossil energy, we won't be doing as much. Goodbye 'economy'; with ramifications.
Funny guy. The only thing masking peak oil is calling things that aren't crude oil, oil. The old definition used to be stuff pumped out of the ground from a reservoir with good porosity. Now everything from biofuels, bitumen sands, oil produced by fracturing non porous rock, NGLs are all lumped together to fool the unobservant into believing oil magically appears like fairy dust.
Still yet to meet peak innovation. Texas now producing 5x more crude oil than it was 20 years ago. Be like Texas.
"Industry estimates say the Permian, which helped put the United States on the path to becoming the world's largest crude producer, has recoverable reserves that exceed all oil and gas produced there over the last 90 years, according to the Texas Railroad Commission."
A technique called “directional drilling” has transformed the energy business. Fifteen years ago the best drillers could force a well-shaft into a gentle arc. These days shafts can be drilled vertically to a depth of several kilometres—then made to turn sharply and continue horizontally for up to 12km (or 7 miles). Will Grace of Schlumberger, an oilfield services company, likens it to dropping a plumb-line from the top of the Empire State Building and then guiding it through the rear and front windscreens of every car parked in the nearby streets.
https://www.scientificamerican.com/article/fracking-without-freshwater-…
Global greening.
"Greening of the Earth and its drivers
...CO2 fertilization effects explain 70% of the observed greening trend, followed by nitrogen deposition (9%), climate change (8%) and land cover change (LCC) (4%)."
https://www.nature.com/articles/nclimate3004
Human CO2 pollution may be "greening" some parts of the planet, but it doesn't have a net cooling effect, nor has it slowed the rise of atmospheric CO2 to any noticeable extent.
"The vegetation cooling effect is large from the energy dissipation perspective, but only about 10%-20% compared to the pace of global warming"
https://www.nasa.gov/feature/greening-of-the-earth-mitigates-surface-wa…
"It would take approximately four
years of drilling at the rate Texas currently drills for oil
and gas to produce the equivalent energy of all oil and
gas used for electricity and heat production currently
in the State from Texas’ geothermal resources.
An aggressive geothermal drilling program at ‘home’ such as this may
serve to free up Texan natural gas for export, instead of
being required for domestic electricity production.
Source: Future of Geothermal Energy in Texas, 2023."
Where's the farmers complaining !!
As well Labour want 2.1 to 5 million ha of new native forest. Guess who owns that land as well!! and you are worried about 400,000 ha of exotics!!
This is getting sillier by the day. Price works just let it work. It will hurt but change does.
It's interesting, I just had correspondence informing me I must pay a yearly fee for storage of someone else's CO2 pollution, because it benefits me. Well I suppose it does in a round about fashion, but it probably benefits politicians flying in and out of Wellington more. The same correspondence contained info about exiting the scheme.
Now I could sell those ethereal fairy dust constructs called "carbon units", but I'm still not entirely convinced that constitutes a benefit for me? I mean effectively I'm merely borrowing the money and paying tax on it while locking that land into needing to be growing trees, which are worthless in any other sense" in perpetuity? Or, I could sell units and be forced to buy them back for some price, manipulated by whatever political ideologue feels it needs to be in the future?
One thing it does is force tree growers to consider whether to bother planting trees in the first place? Perhaps that's the intention? Pines are worthless, unless growing within spitting distance of a port and other species have a small easily flooded market.
The poll showing people want to fix climate change, but don't want the price of petrol to rise, illustrates the problem.no govt would have let the carbon price rise to where it needs to be in an election year. It would be political suicide.
We want our cake and eat it, or at least be promised we can.
Whoever gets in, there is going to be alot of broken promises in the next 3 years, as reality bites.
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