20 December 2012

New Zealand's double dealing and special pleading over the Kyoto Protocol second period and the Doha hooha Part 1

Is Tim Groser a Kyoto pariah? Or a Kyoto visonary? A global emissions reduction emissary or is he tar-sanded with a Canadian brush? I try to make sense of New Zealand's double dealing and special pleading over the Kyoto Protocol second commitment period and the Doha climate change talks hooha.

I am very confused about New Zealand's climate change policy since the Doha international climate change talks (COP18) and New Zealand opting out of a second period of the Kyoto Protocol back on 9 November 2012.

The Kyoto part two opt-out is described as a lose-lose decision that shuts New Zealand out of the Kyoto international carbon markets and is a shambles and a disgrace.

So I have a question for all you climate change blog readers.

If Minister of Climate Change Tim Groser is serious about New Zealand's 2020 greenhouse gas target, why would he forego formally lodging the 2020 target into the existing Kyoto Protocol framework (where the national institutions and arrangements are already up and running), in favour of pledging to meet the target on a voluntary basis?

Let me break that question down into several parts.

  1. Imagine you are the Minister for Climate Change in the government of a small developed nation.
  2. This nation has signed an international treaty with a few other nations which states a short-term national target for emissions of greenhouse gases (GHGs).
  3. This nation enacts the treaty by creating some new institutions; a national register for emissions units, national inventories of GHG emissions, national surveys of afforestation, and public servants to report the predicted progress towards the national target.
  4. The nation has adopted several policies relying on the treaty institutions; an emissions trading scheme, forest sink schemes, research alliances, and international trading of emissions units.
  5. The nation has a second publicly stated medium-term target for GHGs for the years following the expiry of the first target.

If you are serious about that second GHG target, why would you pledge the target on a voluntary basis, when you could have formally lodged your target into the existing treaty (where the national institutions and arrangements already exist)?

Any answers? Anyone? Would you like to phone a friend?

Okay, here's a hint. The Parliamentary Commissioner for the Environment has said that we are on track to exceed the 1990 GHGs baseline by 30% rather than meet the 2020 target of reducing GHGs by 10 to 20% compared to 1990.

Now just because New Zealand's net emissions are likely to consistently increase through to 2020 doesn't automatically mean New Zealand would not meet the 2020 target if translated into a Kyoto second commitment period target. We could just buy extra emissions units from the international Kyoto carbon markets.

That is, if there was a sensibly designed emissions trading scheme. Such a scheme would be 100% "emitter pays", with emitters making their own market-based decisions to either reduce emissions or to buy the emissions units. Well we certainly don't have that.

So my conclusion is that it is not just that Tim Groser has absolutely no intention doing anything domestically to achieve the 2020 target of a 10 to 20% reduction in GHGs. Groser and National also have absolutely no intention of imposing any real carbon price on New Zealand's industrial and agricultural emitters.

18 December 2012

Gerry Brownlee's anti-carbon tax

Gerry Brownlee, formerly a minister of energy and fossil fuel, and currently the Minister for Transport and for bulldozing democracy, heritage and social order in Christchurch, today announced that petrol duty will be increasing by 3 cents a litre annually for the next 3 years.

Specifically mentioned are the Rangiriri and Tamahere-Cambridge sections of the Waikato Expressway, the Mackays to Peka Peka section of the Wellington Northern Corridor and the four-laning of the Groynes to Sawyers Arms (Johns Road) section of the Western Corridor in Christchurch.

The reason given for this policy is that the funding is needed for the Roads of National Significance programme and some upper North Island transport projects. I guess that means more spaghetti motorway in Auckland.

This is crazy policy.

The first level of craziness of the petrol duty hike is that it will affect the benefit-cost analysis (BCA) of each Roads of National Significance (RONS) project. Projects like Transmission Gully Expressway, have already been justified to hearings before the Environment Protection Authority on very marginal benefit/cost ratios. Julie-Anne Genter of the Greens said the benefit/cost ratio of Transmission Gully was 0.6. The RONS don't even break even in BCA terms. Now with the added petrol duty, the marginal benefit/cost ratio would be even worse. However, I bet that won't make Gerry Brownlee or Steven Joyce any less obsessed with them.

The second level of craziness with the petrol duty increase is the Government's complete failure to understand carbon pricing (which is what a petrol duty is) and to anchor their transport, energy and infrastructure policy with effective carbon pricing.

I have no problem with the price of petrol or diesel increasing. Road transport has many externalities that are not priced. It is "elephant in the room" obvious that the most important unpriced externality of liquid fossil fuels is global warming. And not a lack of four-lane expressways.

"But we have an emissions trading scheme!" I hear some one say. "Surely, road transport fuels are included in the NZETS?"

Yes we sort of have an emissions trading scheme which sort of prices carbon. But NZ carbon prices have crashed 72% in 2012.

According to estimates by the Energy and Data part of Joyce's mega-ministry MoBIE, in the three months ended on 30 September 2012, the NZ emissions trading scheme accounted for 0.93 cents out of the regular petrol price of $209.

So we may describe New Zealand's petrol pricing policy as having two mutually conflicting parts. The price includes a component for revenue gathering for unneeded four-lane RONS expressways part (3 cents/litre). The price also includes the NZETS carbon price (0.93 cents/litre).

And the four-lane expressways part exceeds the carbon-pricing emissions reducing ETS part by a factor of 3.

This is the complete opposite of effective carbon pricing. Brownlees's petrol duty, to coin an expression, is an anti-carbon tax.

Keep it real - Carbon offsets from a permanent forest sink project

In this post, I guest-post as myself! This post describes a carbon forest sink project that I am involved in and our debate about whether we should provide carbon offsets to anyone as part of the project. I originally wrote this for the Greens Frogblog

I am one of the trustees of a small 47-hectare carbon forest sink and native re-vegetation project and mountain bike park; "Project Rameka" in the east Takaka hills in Golden Bay.

It's really a response to climate change made by two of my old friends, Bronwen Wall and Jonathan Kennett, who bought the land in 2008. Bronwen and Jonathan decided to apply their experience organising native planting projects in Wellington to climate change after reading the 2007 fourth report of the International Panel on Climate Change (IPCC).

It's been embraced enthusiastically by the Golden Bay community who do the planting, pest control and track work through Project Rameka Inc.

The land is owned by a trust and I am one of the trustees. I did the early accounting for the trust and prepared the application to get the land into the Permanent Forest Sinks Initiative (PFSI).

In return for a 50-year covenant restricting the land use to forest, we receive about 800 carbon credits (assigned amount units) per year for Project Rameka. These units started life as part of New Zealand's 1990 baseline amount of carbon credits under the Kyoto Protocol.

How many credits we get is based on the amount of carbon withdrawn from the atmosphere by the trees. Thanks to the Golden Bay weather, plants grow really quickly. So we really are storing carbon. We have seen 3cm annual growth rings in the few pines we have removed.

For a couple of years we didn't do anything with the units. They sat in our account at the NZ Emissions Unit Register (the 'bank' for carbon credits). We initially thought the units could be a revenue stream to fund more traps or native seedlings. However the many donations to the project have always kept ahead of the costs.

We also thought that if we owned these units then we would be keeping them out of the hands of emitters so possibly we might even be reducing New Zealand's emissions as well as sequestering carbon.

As we began to understand the New Zealand emissions trading scheme (NZETS), we realised that the good done by the Permanent Forest Sink Initiative couldn't make up for the design flaws in the NZETS, as they are joined at the hip. Both schemes create and use carbon credits that are bought, sold and have prices. We could say that the PFSI and the NZETS are both limbs connected by the blood flow of carbon credits to the body, the international carbon trading market.

So when we were approached by Green Party MP Kevin Hague, to offset his greenhouse gas emissions, we didn't say yes straight away. We had a bit of a discussion about it. Trying of course to avoid MEGO; "My Eyes Glaze Over", as we would rather be talking about this winter's planting plan than carbon trading. After much discussion we had two options.

One option was to say no we don't want a bar of carbon offsetting.

We were aware that the Tyndall Centre's Kevin Anderson has said that "offsets are worse than doing nothing".

Selling our units as "offsets" could imply that we accept that international Kyoto-style emissions trading and offsetting and schemes like the NZETS are sufficient responses to climate change. That clearly isn't the case. We would agree with James Hansen that the UNFCCC and Kyoto processes have not and will not achieve the magnitude of emissions reductions the science tells us is necessary.

We think the NZETS is a joke as it has no cap on the number of units given free to emitters and it allows unlimited use of cheap units from the much larger international carbon market.

The other option was acknowledge the problems with the NZETS, and come up with our own version of offsetting in negotiation with Kevin Hague. And that's what we did.

Why did we do this? Well, we know that Kevin's flying is not for a weekend of shopping in Melbourne, but part of the essential price of putting the Green message to the public. We support the Greens as the only party with good policy on climate change. The fact that the Green MPs offset their flying emissions does have real political value.

This struck home to me back in June this year when I went to a talk about the 'Rio+20' conference. Kennedy Graham described the conference's failure to address climate change as a double crisis, an environmental crisis and a crisis of international governance.

Neophyte Minister of the Environment Amy Adams defended business-as-usual and patronised Kennedy, saying he was too idealistic. Some one asked Adams if she offset her flying and what she did personally to reduce her emissions. She completely fluffed her answer. Moral victory to Kennedy who we know had offset his air travel to Rio.

What does this offsetting look like?

We cancel, not sell, our assigned amount units, in return for payment from Kevin. A sale means the unit can be resold many times before being used by an emitter in the NZETS to allow emissions. 'Cancelling' means the unit legally ceases to exist. It can never be used by an emitter. We could insist on a higher price per tonne of GHGs than the current NZ market price which has recently been less than the price of a cup of coffee. With Kevin we settled on $25 per tonne, which was the price discussed when the NZETS was being amended in 2009.

We also let our Golden Bay network know we are getting money for offsetting from Kevin Hague. The Project Rameka team had no problem and immediately came up with new trapping and planting projects for the money. As ever they exceeded expectations. They went out and bought the traps and installed them before any money had changed hands!

So far we have not agreed to provide any offsetting service to anyone but Kevin Hague. We have been asked a few times to offset discretionary personal overseas travel and we have said no. Flying that doesn't seem that essential doesn't tick all the boxes the same as our arrangement with Kevin Hague.

Since we started our offsetting arrangement with Kevin, the price of carbon has continued to decline and the NZETS has been made even more ineffective. The Government has permanently excluded agriculture from the NZETS and has extended the two-tonne-for-one-unit discount for emitters. Tim Groser remains welded to the idea of "lowest international cost".

As far as commercial carbon foresters are concerned, the NZETS has gone pear-shaped because of the price collapse.

Carbon foresters have seen the value of their forests decline by 90%. Pine seedling planting in nurseries has declined by millions and forest clearance for dairy conversions in the North Island looks like starting all over again.

Brian Fallow the Herald economics editor describes the NZETS and National's climate change policies as a shambles and a disgrace.

It appears the only people trading forest carbon in New Zealand that are happy at the moment are the Rameka Trustees and Kevin Hague.

We are happy as we are supporting the Greens, getting a realistic carbon price for our units and recycling the proceeds into more carbon-sequestering re-vegetation.

Kevin has said to us that he appreciates being able to go for a bike ride at Rameka where his flying is offset, and he also appreciates that we let him know what his money was spent on. He said to us "It felt real".

If only we could get the rest of New Zealand's climate change and emissions trading policies just as real in terms of being the right incentive at the right price to really reduce greenhouse gas emissions.