tag:blogger.com,1999:blog-5917594270963421799.post8463734114161114686..comments2023-06-20T19:34:32.711+12:00Comments on New Zealand's Low-Emission Future: Finding the best cure for a "hot air" hangoverMotu Researchhttp://www.blogger.com/profile/02438001502924434514noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5917594270963421799.post-23310242850589384382016-04-26T13:48:48.083+12:002016-04-26T13:48:48.083+12:00Thank you very much for your comments.
Regardin...Thank you very much for your comments. <br /><br />Regarding your first point: I agree with you completely that the rationale "everybody else is doing it" is not useful for the climate system and NZ certainly could have done much better from that perspective. I am not using that to justify the emission value of NZ's choice, but it does reinforce the legality of NZ's choice under the Kyoto Protocol. <br /><br />Regarding your assertion around "worst offender": According to the MF report, NZ used the most ERUs by proportion but Germany and the UK had larger absolute numbers of ERUs and many other countries also used them. Using a relatively smaller proportion of ERUs would not have improved the justification for NZ's choice (or that by other countries who sold or bought weak ERUs). Every tonne matters. <br /><br />Regarding your assertion of "fake units": ERUs were the outcome of a weak agreement but were not "fake" units because they were backed by national targets as a safeguard against projects lacking integrity. Some were of better quality than others (e.g. those associated with green investment schemes). <br /><br />Regarding your second point: The Paris Agreement is an important step forward, but given the variability in countries' target form (absolute versus intensity, sectoral versus economy wide), target ambition and domestic policies, it does not yet eliminate the potential for emission leakage which would cancel out emission reductions in NZ. You raise important considerations for the phase-out of industrial free allocation.<br /><br />Regarding your third point: Policy uncertainty is a major deterrent to low-emission investment. As a matter of principle, changes to NZ ETS rules should be signalled in advance where possible to protect market operation. Given reporting is done on an annual basis, it would make sense for the change in obligation to be applied from the beginning of a reporting year. In the submission which Suzi Kerr and I made to the ETS Review, we stated we could see no reason why the change should be delayed beyond January 2017.<br /><br />As a reminder, the next round of submissions on the NZ ETS is due on 30 April 2016. I encourage you to share your views with the government. Cheers! Catherine Leininghttps://www.blogger.com/profile/04470674032902565423noreply@blogger.comtag:blogger.com,1999:blog-5917594270963421799.post-67164752401511414922016-04-24T14:23:08.641+12:002016-04-24T14:23:08.641+12:00Agree with the need to increase ambition/stringenc...Agree with the need to increase ambition/stringency of NZ ETS settings, but a few quibbles with this post:<br /><br />- Yes, many governments used low-integrity ERUs but as the Morgan Foundation’s report shows NZ was by far the worst offender. Moreover, justifying environmentally harmful decisions (using fake ERUs) on the basis that “other governments did it too” is a logical fallacy.<br /><br />- “There is also merit to phasing out industrial free allocation when the risk of emission leakage is no longer significant.” To start with, the new global agreement is comprehensive (or as close to it as we will get). There is nowhere left to leak to. Even if there was, I recall someone once said that trying to address leakage through NZ ETS design “would risk increasing the overall economic cost New Zealand faces to meet its international obligations but fail to secure any significant global environmental gain”. The justification for subsidising CO2 pollution is just as poor as the argument for subsidising milk, car or steel output in NZ: It is not in our economic interest to shield emitters from the cost of pollution for any length of time. We are close to two decades from the time NZ govts signalled a clear intent to pursue carbon pricing as a preferred approach. How many decades do big emitters need for a transition? How many decades do we have left for drastic CO2 reductions to occur?<br /><br />- The 2 for 1 subsidy was never justified by any evidence or analysis. It was introduced as a temporary measure in the context of a global economic crisis (which actually impacted NZ to a relatively small degree). Any serious market participant has been aware this design feature was a political sop that could be pulled immediately. Removing it should not be portrayed as something that needs to be broken softly to market participants. It was an unjustified emergency measure.Anonymousnoreply@blogger.com