Climate change: More policy failure

Reducing greenhouse gas emissions is difficult and time consuming. A lot of emissions are tied up with capital-intensive infrastructure, which is difficult to replace. It will take time to shift our electricity generation to a more renewable mix, because we need to shut down old power stations and build new ones. It will take time to reduce our transport emissions, because we will need to build better public transport and replace a lot of cars with more efficient ones. It will take time to reduce our agricultural emissions, because farmers are dicks and refuse to adopt greener farming practices. Which means that the most powerful short-term method of reducing emissions is stopping people from cutting down trees.

The ETS achieved this, significantly reducing deforestation immediately after its introduction. But now the price has crashed, and it is on the rise again:

Deforestation intentions have soared as the emissions trading scheme, at least at current rock-bottom prices, is no longer seen as a barrier to switching to other land uses.

A survey of large forest owners (with over 10,000ha) by Professor Bruce Manley of Canterbury University has found they intend to deforest 39,000ha between now and 2020, mainly in the central North Island and mainly to switch to dairy farming.

They represent three-quarters of the plantation forests with trees older than 20 years, which are likely to be harvested within the next eight years.

This is basically twice what it was last year, and it is all a result of low carbon prices. Which we're exposed to because of a deliberate design decision by Labour to allow international units. While the government has banned the worst sort of international units from use in New Zealand, they still affect the market price. Which means soaring emissions, and much less ability to offset them in future.

As for how to fix it, the only way of doing it seems to be decouple the New Zealand carbon market from international ones. The good news is that the government's refusal to sign up for Kyoto II will see that happen anyway - but by then it may be too late. If the government wants to prevent another chainsaw massacre, it needs to act now, rather than twiddling its thumbs for two years.