Climate Change Minister David Parker gave an interesting seminar yesterday in the Buddle Findlay sustainability series, on designing an emissions trading scheme. It's an interesting introduction to emissions trading, but gives nothing away about the specifics of the government's plans, such as its preferred allocation scheme. But it did reveal something very important: that we are not going to make the deadline for introducing solid climate change policy.
The Kyoto Protocol's first commitment period begins on January 1, 2008. From that day forward, every tonne of CO2 (or tonne-equivalent of other gases) will cost us, at a price which is likely to be around $25 / tonne. So, by that stage, we want to have some serious policy in place to reduce those costs. Unfortunately, the government is dragging its feet. Last month in a select committee report they let slip that they would be cutting it fine on interim policy to reduce deforestation and agricultural emissions. And during his seminar Parker let slip the timeline for the introduction of emissions trading:
Over the next month or so Cabinet will decide whether to proceed further with a New Zealand emissions trading scheme. That requires Cabinet to consider some initial in-principle core design features.Following those decisions, the government will engage with stakeholders to gain feedback and input on core design features.
After considering public feedback, Cabinet will make decisions on the core design features of a New Zealand emissions trading scheme before legislation is introduced...
So, a decision in principle in September, and a few months of stakeholder consultation means that we will be lucky to see legislation ontroduced by the end of the year. The government has promised a full select committee process, so any bill is unlikey to pass before June 2008 - six months after the deadline. And even then, the core decisions around allocation and the timing of the entry of sectors into the scheme are put off to another day. Meanwhile, the whole idea of a transitional measure to price energy-sector emissions over CP1 - which received its own discussion document [PDF] just nine months ago - seems to have disappeared completely from the picture. Once again, it seems, the perfect has been the enemy of the good, and we have wasted time dreaming about an ideal policy for the future (while somehow managing to avoid making any of the real policy decisions e.g. allocation), while refusing to implement good-enough policy for the meantime. And we'll be paying for that mistake from January 1st.
