Climate Change: Getting it done

Back in May, the government signed a $140 million deal with NZ Steel to halve its emissions by 2030. Now, they've followed it up with a $90 million subsidy to Fonterra to bring forward its scheduled emissions reductions:

The Government has announced it will partner with Fonterra in an attempt to cut coal use in the dairy industry, and reduce agricultural emissions.

The relationship will see the dairy giant commit to cutting coal usage across six of its manufacturing sites which it says will result in 2.1 million tonnes of early C02e reductions. This equates to taking 120,000 cars off the road.

The changes are expected to deliver 2.69% of all New Zealand’s required emission reductions between 2026-2030.

This is not as good a deal for us as NZ Steel - the cost of the cuts is $43/ton, vs $16.20/ton for NZ Steel, and there's no subsidy which can be cut to offset costs. Its also morally repugnant that we're further subsidising Aotearoa's worst polluter, to do something that the market looked certain to force it to do anyway. But on the gripping hand, we need to cut emissions as quickly as possible, and this gets it done. And there should hopefully be a nice side-benefit of killing off a bunch of coal mines too.

The important thing now is to rip those savings right out of the ETS to ensure they actually happen, rather than just being emitted by someone else. Otherwise, the government just paid $90 million to shuffle emissions around and make a dirty company look good.