The Opportunities Party would allow the Climate Change Commission to directly manage prices in the emissions trading scheme and reinvest proceeds over a range of priorities.
TOP announced this policy and several others as part of its Climate Opportunities package which sets out how it would pursue emissions reductions and climate resilience.
The three main policies are to provide farmers with ‘biodiversity credits’ for planting natives on marginal land, getting the national bus fleet to 100% electric by 2030, and tightening the rules of the emissions trading scheme.
Secondary market prices for New Zealand carbon credits have fallen sharply this year after the government ignored Climate Commission advice to lift auction prices and lower volumes in December.
Further uncertainty has been thrown over the scheme by the commission's advice to adjust the rules to better incentivise gross emission reductions, not just forestry offsets.
TOP leader Raf Manji has backed that idea and said that his party would exclude new forestry offsets and cap the number of units, if elected to government in the October election.
This is something officials at the Ministry for the Environment are working on currently, and a six week public consultation period is expected to begin in the next month or so.
Options floated by the Climate Change Commission included limiting the number of forestry offsets allowed into the scheme, or somehow making offsets worth less than gross reductions.
TOP would go one step further than just following the Climate Change Commission’s advice and would hand over management of the scheme, much like the Reserve Bank is put in charge of setting interest rates.
The policy would enable the commission to set carbon prices through an Official Carbon Rate, or OCAR, in a nod to the Reserve Bank’s Official Cash Rate.
Revenue from the scheme would be reinvested into renewable energy development, emissions free transport, and a carbon dividend.
The Ministry for the Environment recently confirmed it was looking at a carbon dividend mechanism as part of wider work to address the distributional impacts of climate change.
Carbon dividends are popular on both ends of the political spectrum, with support from both the Act and Green parties.
Money from the scheme has been rapidly running out, however, leaving some question as to how much TOP would have to spread across its various policy goals.
The Government has made $6.6 billion of funding available in the Climate Emergency Response Fund, but Treasury only expects the ETS scheme to contribute $4.7 billion of that money.
Much of this money has already been allocated to various projects. Notably, $140 million for NZ Steel to decarbonise its Glenbrook Steel Mill.
Manji said climate change was the defining challenge of our time and leaders had a responsibility to reduce emissions and prepare for a net-zero world.
“Our three emissions reductions policies demonstrate our party’s commitment to system-level change through bold, creative solutions and smart investment”.
The electric bus policy brings forward the existing Government goal by five years and would cover the cost for regional councils to make the switch.
Manji said this would reduce emissions by approximately 171,000 tonnes—the equivalent of 75,000 petrol cars—each year and would cost about $2.5 billion.
In a TVNZ-Kantar poll released on Thursday evening, the political party was polling at just 1% of the vote and hasn’t polled much higher than 2% in most other surveys to date.
However, Manji hopes to win Christchurch’s Ilam seat and could bring the party into parliament on his coattails. The former city councillor came second to Gerry Brownlee in 2017, but only collected 23% of the vote.
National and Act were in a position to form a government in the TVNZ-Kantar poll, while the left-leaning bloc would not have enough seats to form a coalition
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