Climate Change: James Shaw's legacy keeps paying off

One of the central planks of the previous Labour-Green government's emissions reduction policy was GIDI (Government Investment in Decarbonising Industry). This was basically using ETS revenue to pay polluters to clean up production, reducing emissions while protecting jobs. Corporate welfare, but it got the job done, and was often a net saving to the government due to reduced pollution subsidies. The biggest success in that scheme was the May 2023 deal with NZ Steel, which saw them being paid $140 million to halve their emissions by 2030 - an effective carbon price for the reductions of $16.20 per ton. Originally this was meant to see reductions from 2027, but yesterday NZ Steel announced that the project would be brought forward to 2025, and it would reduce emissions even further:

Revised estimates from NZ Steel said its carbon emissions will drop by around a million tonnes a year from when the furnace comes online compared with 800,000 tonnes originally announced. That's over one percent of New Zealand's gross emissions.

NZ Steel also said the furnace will start operating sooner than announced, by the end of 2025.

[...]

By his estimate, the government's savings on carbon credits would pay for the up to $140m taxpayer investment in the electric furnace in about three years, though it would depend on the carbon price from 2026 onwards.

This is obviously good news, and shows the soundness of Shaw's scheme (though I'd still prefer the government to be taking an equity stake in exchange for its money). Which makes GIDI's cancellation by National look even worse. This was a hugely successful policy which is producing ongoing benefits, and its removal has left a huge hole in our carbon budget. Its almost as if National is just ideologically opposed to emissions reduction.

Saying what needed to be said

National today announced that it would be introducing its corrupt Muldoonist resource consent fast-track legislation to the House today, and ramming it through its first reading under urgency. Unusually, the list of projects that will be pre-approved will not be included in the bill, but will be added later, so the public will not have a chance to scrutinise it and submit on it at select committee. Which smacks of yet another attempt to limit public scrutiny, in violation of our constitutional norms.

Labour has been weak on this, but today in Question Time James Shaw said what needed to be said, asking RMA Reform Minister Chris Bishop (at 4:30s]:

is he aware that rushing legislation with such extraordinary executive powers through parliament under urgency with little public scrutiny creates a risk that any of the projects that are approved as a result of this bill could find themselves subject to future scrutiny, which could include the loss of the consent, possibly without compensation.

And all Bishop could do is splutter about the need to avoid "sovereign risk". But creating such risk is the point: what is legislated can be un-legislated. And where the legislation is passed by an abusive process, contrary to our constitutional norms, and to be honest, simply corrupt, repeal and cancellation without compensation is a necessity. Those bribing Ministers to have their projects included on their Muldoonist list need to be very aware of that.

(The next stage to keep them aware is obviously a Member's Bill. But that'll have to wait until the fast-track law actually passes).

As for Bishop, its a bit fucking rich of him, having just so viciously demonstrated how policy can change when the government does, to complain that a future government might not respect his decisions. Unlike Bishop, the Greens will at least do it with a proper select committee process, allowing everyone to be heard, and for the law to be considered legitimate. Though "stopping people from profiting from an ongoing crime" might in fact be one of the few justifications for all-stages urgency...

James Shaw: At least he tried

The big political news of the day is James Shaw's resignation as Green co-leader. It was expected: his refusal to contest Wellington Central clearly signalled that he was planning to leave Parliament if Labour lost the election, and the change in government was the time to go. And with the Greens winning a record vote last election, there's a good depth of talent there to replace him.

Shaw's big success as a Minister was getting the Zero Carbon Act over the line. His big failure was failing to get agriculture into the ETS and make our biggest polluters pay their fair share of the damage they do. That failure was forced by Labour's cowardice, which is Shaw's Ministerial career in a nutshell: trying to do the right thing and being constantly undermined by a partner who just didn't grasp the seriousness of the problem, didn't care, or thought they could PR their way out of it, as if an existential crisis could be handled by their usual lies and bullshit. I'm not trying to paint Shaw as a radical here, but I credit him with at least recognising what needs to be done. He didn't always do the best job in presenting that to Labour - too much pre-watering-down to try and get their agreement (again, see agriculture) - but at least he tried. And events over e.g. the ETS proved him right again and again.

(And now we have a climate minister who doesn't care about the climate, doesn't recognise what needs to be done, and isn't interested in actually trying to keep us all alive. And we are going to notice it in policy, and in disasters. You have been warned...)

Shaw will stay in Parliament to push his member's bill to put the environment in the BORA (something I expect National to vote down out of pure spite). And then he'll finally escape. Which is good: Parliament is a toxic environment which ruins people, and its good for people to get out before they are institutionalised into it. There's a lot of other good work which can be done outside of the hellmouth - possibly better, more effective work - and I look forward to seeing what he will do next.

Climate Change: Overturned

Last December, Labour made the first in a series of terrible climate decisions, over-ruling Climate Change Minister James Shaw and the Climate Change Commission to sabotage the ETS by setting excessively high volumes and low prices. The result was immediate: the carbon price crashed from ~$85/ton and began a long-term decline (which has only worsened as Labour has done more to undermine it). But today, thanks to Lawyers for Climate Action, that decision has been overturned:

Today the High Court gave judgment in favour of Lawyers for Climate Action NZ Inc in a judicial review of the Regulations which set the number of additional Emissions Trading Scheme (ETS) units available over the next five years and imposed various price restrictions. The Regulations are referred to as the Climate Change (Auctions, Limits, and Price Controls for Units) Amendment Regulations 2022 and were made in December 2022.

The judgment means that the Minister of Climate Change must now reconsider the unit limit and price control settings for 2023 to 2027 by 30 September 2023.

The decision was by consent - Shaw accepted that his decision-making process was flawed, and that he did not have reasonable grounds to conclude that Labour's preferred settings were lawful and in accordance with our emissions budgets or Paris NDC. Which means they will have to be re-made. The government is currently considering settings for 2024 - 2028, and this decision will neatly allow them to bypass the statutory requirements for changing the settings for the next two years (since those requirements were met or irrelevant for 2024 and 2025 respectively).

This is a significant victory for the climate, and a significant defeat for chickenshit, sabotaging Labour. And hopefully it'll help set a convention in future of always following the Climate Commission, rather than trying to over-rule it. We all owe Lawyers for Climate Action a debt of gratitude. And if you'd like to support them in their work, you can make a donation here.

Climate Change: Eyes off the ball

Back in December, the Labour Party sabotaged our climate change policy, ignoring advice from the Climate Commission and Climate Change Minister James Shaw in order to keep carbon prices low. This caused a collapse in the carbon price, as people lost confidence in the scheme and fled the market. And that's a Bad Thing, because, as the Climate Change Commission keeps pointing out, we need high carbon prices to drive the gross emissions reductions we want, and stop people burning coal and gas. In other words, Labour's short-sighted, chickenshit decision is likely to have a significant impact on whether we can meet our carbon emissions budget.

This is the sort of thing you'd expect the Climate Change Minister to be paying attention to. So back in April, I filed an OIA request, asking for advice and communications on the impacts of this decline in carbon prices. Today - two months late - I finally received the response. There's some talking points and spin to journalists, and a weekly update on what the price is and how it compares internationally. But on the actual, substantive issue, it's LOL, of course not:

No dedicated advice related to the impacts of the drop in the NZU (Emission unit) price has been produced by the Ministry for the Environment since December 2022.

This is appalling. This is our central policy for reducing emissions, and the price it produces is the key driver of emissions reductions. A Minister who was serious about their portfolio and paying attention would be asking their Ministry if this was a problem which we might need to do something about (though if the Ministry was doing their job properly, the Minister wouldn't have to ask at all). Instead, it seems like everyone's eye is resolutely off the sporting metaphor. The most important public policy issue of our time, which is already flooding cities and threatening to bankrupt local government, and even the Ministers who supposedly care about it just aren't paying attention.

And meanwhile, that central policy continues to collapse around us. Today, the carbon price fell to $46/ton, a level not seen since 2020, at which time it was still profitable to burn coal. I wonder if the Minister is finally paying attention now?

Climate Change: A big deal

If you thought about Aotearoa's non-agricultural emissions a few years ago, four mega-emitters stood out: the Marsden Point oil refinery, the Huntly power station, the Glenbrook steel mill, and the Motunui methanol plant. Marsden Point shut down last year and is being dismantled; Huntly has been scheduled for shutdown for years, but Genesis keeps extending and extending them - currently they're meant to be off coal in 2025 except in "exceptional circumstances" (which probably means "whenever it is profitable for us to do so"). But now the government has stepped in over Glenbrook, announcing a $140 million deal to halve its emissions by 2030. It is the biggest single action to reduce emissions in Aotearoa's history, and it will make a real difference, lopping a full 1% off our annual emissions, and getting us 5% of the way to meeting our 2026-2030 carbon budget. Which sounds small, but doing that in one hit is a massive change, equivalent to shooting 200,000 cows.

This is a good deal: the lifetime cost of the emissions reductions is apparently $16.20 / ton - much cheaper than the current lowball carbon price of $54 / ton, let alone the 2030 cost of ~NZ$200. Its so cheap in fact that you have to wonder why NZ Steel didn't pay for it themselves, especially given that it would have cost them less than a year's profit. Which just goes to show the perverse incentives the ETS sets: While economists talk about "marginal prices", in practice as long as polluters receive subsidies, they have every incentive to keep receiving them, and no incentive to reduce emissions. Especially when reducing them requires (horror) capital investment, which could be paid out to foreign shareholders as dividends.

Which gets us to another perverse incentive: the fact that Aotearoa pays these subsidies means we then have an incentive to pay again to reduce emissions. $140 million is a lot of money - but its in the same ballpark as the 2.15 million tons of carbon credits we give this company every year. Reducing its emissions therefore becomes profitable for the government, provided the reduction cost is lower than the market price (or the 2030 price, if you think beyond the next election). In this case, if the expected emissions reduction leads to an equivalent reduction in subsidies, then this pays off for the government in 5 years (quicker if carbon prices rise; or just one year if you think in 2030 prices). Which is a much better return than the average Auckland motorway.

But while this is a good deal, thanks to the shitty policy structure Labour has saddled itself with, its also morally repugnant. Corporate welfare. We should not be paying companies to do things they can and should pay for themselves, and the fact that its profitable for the government to do so is an indictment of the current policy structure. We should also not be handing over 25% of the total value of a company (Bluescope's New Zealand and Pacific segment has a net value of A$530.9 million according to its latest annual report (p88)) without getting some equity and control. If we want to do this sort of deal, we should be investing in these companies (maybe through the Cullen Fund), and sharing in the long-term returns, rather than just shovelling money at their foreign shareholders. And if they're reluctant, we should be regulating the living shit out of them until they are not.

And all that said, on the gripping hand this is 800,000 tons a year. Now do Motunui please.

The "most open and transparent government ever" again

One of the good transparency moves over the last decade has been an increasing shift to the government releasing information proactively. We now assume as a matter of course that the cabinet papers and briefings underlying every significant government decision will end up on an agency website somewhere. These documents usually contain redactions, and usually refer to a justification under the OIA for doing so, but they're available, without anyone having to request them, and that's good.

But this isn't just driven by a desire for transparency: proactive releases aren't actually covered by the OIA, so those redactions don't actually have to be lawful under the Act. And this is used by the government to keep information secret and gain tighter message control. Newsroom's Marc Daalder has a perfect example today of a Minister caught in the act of censoring government information to keep it out of the public eye:

Climate Change Minister James Shaw redacted parts of a Cabinet paper he released last year, even after officials advised him not to.

The paper predominately dealt with a decision on price controls in the Emissions Trading Scheme (ETS), which Shaw announced at the same time he released the document. But it also contained reference to an upcoming review of the ETS which Cabinet had yet to make final decisions on.

According to a separate briefing released to Newsroom under the Official Information Act (OIA), officials from the Ministry for the Environment told Shaw there were no valid grounds under the OIA to redact the reference to the ETS review. Releasing the paper would therefore effectively announce the review. Alternatively, they advised, Shaw could choose not to release the paper.

Instead, Shaw went a third way - releasing the Cabinet paper but redacting the mentions of the ETS review against official advice.

If the paper had been requested under the OIA, Shaw would not have been able to hide this information, and his decision to do so would have been reviewable by the Ombudsman. But because he proactively released it, he could do what he liked, and hide whatever he wanted to keep the public in the dark.

This is bad, but the real problem is that the fact that a document "will soon" be proactively released is a reason to refuse a request for it. But then, that eventual proactive release can contain redactions which are not lawful under the OIA. Shaw has been particularly assiduous about refusing things on this basis, but what we've seen here is that we can have no faith that his eventual redactions will be lawful. And he's not the only one - a recent case note from the Ombudsman found the Minister of Health was also playing this game, and as a result the Ombudsman will be taking a closer look at s18(d) refusals generally. Because you can see how this undermines trust in the entire OIA system.

As for how to fix it, the short-term solution is to request unredacted copies of every proactive release. I've found it useful when doing this to ask that the request be handled urgently, to note explicitly that saying that they stand by their redactions should not take more than a few days, and to explicitly threaten an "undue delay" complaint if they piss around (setting a clear path-of-least-work incentive for lawful behaviour). Alternatively, Daalder has shown that requesting the briefings on specific proactive releases can be fruitful and informative.

The long-term solutions are twofold: the OIA needs a formal framework for proactive release (the UK FOIA's model of publication schemes seems to be a good one to steal), and proactive release needs to be reviewable by the Ombudsman. This needs to include not just redactions, but also non-compliance with a publication scheme - failing to release something on time as expected. This solution would take years to put in place, but in the meantime it seems easy enough to add reviewing redactions in proactive releases to the grounds of complaint to the Ombudsman, to ensure they are lawful. The Ombudsman's jurisdiction already needs to be significantly fixed to plug a number of holes, so that could be done at the same time. The problem of course is that pro-secrecy Ministers have no incentive to do any of this.

The Greens, Labour, and coalition enforcement

James Shaw gave the Green party's annual "state of the planet" address over the weekend, in which he expressed frustration with Labour for not doing enough on climate change. His solution is to elect more Green MPs, so they have more power within any government arrangement, and can hold Labour to account. Which is obvious, and yet at the same time also wrong. Because insofar as Cabinet (or in the end, Parliament) operates by majoritarianism, then the Greens can simply be rolled and ignored by their larger coalition partner, and shit decisions like this and this and this made.

The core problem here isn't lack of numbers within a coalition, but a lack of enforcement for the coalition agreement itself. Because Labour is fundamentally an anti-environment, status quo party, unwilling to make the necessary changes required for us to survive the 21st century. Whether you think they're marginally better than National, or worse because they're deceitful rather than honest about their anti-environmentalism is immaterial. The fact remains that they have demonstrated their hostility through their policies, promising one thing, then doing another the moment it gets hard or a fossil lobbyist whines at them, despite a coalition agreement which committed them to "achieving the purpose and goals of the Zero Carbon Act".

When working with Labour, the Greens need to treat them as hostile, rather than as good-faith partners, and they need to design any future governing arrangement to suit. And this means milestones and audits by an independent party (not the Minister, who obviously has a conflict of interest), with failure to meet them resulting in automatically pulling the plug and toppling the government unless the party membership decides to continue. Because if you want Labour to do something, you need to focus their minds on what matters to them: their big salaries, their jobs, their prestige.

(The people of Aotearoa generally expect governments to go full term, and hate "instability". But any failure to meet milestones will be Labour's fault, and as a small party, the Greens don't need to care about the wider public, just their own voters. Obviously, the ideal outcome here is that Labour keeps its commitments for once, and the threat is not needed).

In his speech, Shaw said "We cannot compromise any longer on the future of our planet". Its time he fucking started acting like it.

Climate Change: The lost decades

Over the last few days Aotearoa was hit by ex-tropical cyclone Gabrielle - the second tropical cyclone to hit us in just two months. Huge chunks of the country have been flooded, 225,000 people have lost electricity (some will be without it for two weeks), and at least two people are dead. The economic impact is estimated in the tens of billions. Before Parliament adjourned so MPs could go and help their constituents, Climate Minister James Shaw gave a speech drawing the obvious link to climate change [video], and warning that we are now entering "a period of consequences":

I have to say that, as I stand here today, I struggle to find words to express what I am thinking and feeling about this particular crisis. I don't think I've ever felt as sad or as angry about the lost decades that we spent bickering and arguing about whether climate change was real or not, whether it was caused by humans or not, whether it was bad or not, whether we should do something about it or not, because it is clearly here now, and if we do not act, it will get worse.

I've been recalling, actually, a quote from a different time about a different crisis: "The era of procrastination, of half measures, of soothing and baffling expedience of delays, is coming to its close. In its place we are entering a period of consequences." And there will be people who say, you know—just as the National Rifle Association in the United States does about shootings over there—it's "too soon" to talk about these things, but we are standing in it right now. This is a climate change - related event. The severity of it, of course, made worse by the fact that our global temperatures have already increased by 1.1 degrees. We need to stop making excuses for inaction. We cannot put our heads in the sand when the beach is flooding. We must act now.

Newsroom's Marc Daalder has talked about this period of consequences - or, as he put it, Alt title: Fuck around and find out. But I'd like to look at the "fucking around" part. Because there is a lot here to be angry about, and people we need to hold to account.

Way back in 1992, the then-National government endorsed the United Nations Framework Convention on Climate Change, in which they promised to reduce emissions. They followed this up in 1998 by signing the Kyoto Protocol, committing us to a binding emissions reduction target. Environment Minister Simon Upton did a lot of work, developing a fully-formed, all-gases, all-sectors emissions trading scheme, but his National colleagues - farmers and climate-change deniers - fucked around, chickening out of implementing it at the last minute, leaving the problem for future governments.

In 2002 the then-Labour government ratified the Kyoto Protocol. They then fucked around, switching from an ETS to a carbon tax and then dumping it under pressure from their coalition partners. They chickened out of making farmers pay a minimal levy on agricultural emissions, while repealing existing regulatory solutions to reduce emissions in favour of a "perfect" price mechanism which didn't exist yet. They then switched back to a partial emissions trading scheme (wasting another three years in policy development), which they loaded with pollution subsidies and opt-outs, and did not pass until literally the last days of their term. It was then immediately gutted by National.

Not content with gutting the ETS, the new National government elected in 2008 set up a "review" of climate change policy packed with climate change deniers to undermine policy even further, while repealing the thermal electricity ban and biofuels obligation. They then gutted the ETS even more, adding even more subsidies for polluters. At the same time, they announced a "50% by 2050" emissions reduction target, and ratified the Paris agreement. But they fucked around, and did nothing to meet their obligations.

In 2017, then-Labour leader Jacinda Ardern called climate change "my generation's nuclear free moment". In 2019 the government she led passed the Zero Carbon Act, ostensibly committing us to long-term emissions reductions, with plans, budgets, reviews, and all manner of bureaucratic bullshit. And then they fucked around, repeatedly fucking with the carbon market to keep carbon prices low, repeatedly delaying making agricultural polluters pay for their pollution (and then only at the lowest possible level), and introducing even more subsidies for polluters. They've now pissed all over their carbon budget by subsidising petrol.

All of these governments fucked around. There's a common theme of hard-working climate ministers - Simon Upton, Pete Hodgson, and James Shaw - being betrayed by their Cabinet colleagues and having their plans dumped (Nick Smith is a malignant exception to this, being a collaborator with climate change deniers). There's another of constantly grovelling to farmers, a dirty, inefficient sector which receives more in subsidies than it pays in taxes, and which when you factor in the costs of its pollution, seems to be a net drain on New Zealand. And there's a common theme of them viewing climate change as a problem for the future, a mess they can leave for someone else to clean up. The consequences of that irresponsible short-term thinking can be seen on the East Coast today.

They all fucked around, and we're now finding out. And the people who fucked around got knighthoods and big pensions and posh post-political careers with banks and SOEs and crown entities. They got rich, while kiwis got flooded and left in the dark. And its time we held them accountable for it.

Climate Change: The emissions deficit

In March last year, in a panic over rising petrol prices caused by Russia's invasion of Ukraine, the government made a poor decision, "temporarily" cutting fuel excise tax by 25 cents a litre. Of course, it turned out not to be temporary at all, having been extended in May, July, December, and again this week. The fiscal cost of that decision is $718 million so far, and it will get higher since the cut is likely to be extended and extended until after the election. That comes straight out of the roading budget, which now has no money to pay for repairs caused by climate-change-induced storms. The emissions cost is roughly 400,000 tons (so far) and rising. Which will need to be paid back somehow with other cuts if we are to meet our carbon budget.

But that's not the only poor decision this government has made. In December, they massively increased pollution subsidies while also continuing price subsidies built into the ETS, in defiance of climate commission advice. The last change means that polluters will continue to enjoy an extra 7 million tons of pollution a year - nearly 10% of our gross national emissions. The kicker? The government is legally obliged to pay it all back. Section 30IA of the Climate Change Response Act 2002 requires the government to obtain greenhouse gas reductions to cover any excess units introduced into the system by pollution subsidies or ETS auction settings. Meaning the seven million tons they gave away last year, and the 7 million tons they plan to give away unnecessarily this year are going to need to be balanced by emissions cuts, soaked up with trees, or paid for with units purchased overseas (at a likely cost far in excess of the $150 / ton the government uses in its internal budgets). According to the first Newsroom article linked above, the government currently has no plan to do this. Climate Minister James Shaw "wants to have an intentional conversation with his Labour colleagues" about it, but on past performance, they'll laugh in his face, say "fuck your statutory obligations", and leave the problem for someone else to solve.

Heckuva job they're doing on the climate crisis, isn't it? Makes you think they're really earning their $296,007 salaries, right?

Meanwhile, this weeks Auckland floods show the reality of the crisis: going soft on polluters simply means that we all pay, not just financially, but in storms and floods and ruined homes and misery. It would be nice if the government learned that lesson, and started doing what is required.

Climate Change: James Shaw pretends to be helpless

RNZ this morning reports that Climate Change Minister James Shaw is open to another look at climate change rules to ensure that the Zero Carbon Act and its statutory target can actually be legally enforced:

"If the temperature threshold is the point of the entire legislation, then surely it should be part of the actual decision."

If court action revealed that climate change legislation was not protecting citizens effectively then it was worth reconsidering it, Shaw said.

Changes were not being actively investigated, and they were waiting on judgements to land.

The law in question is s5ZN of the Climate Change Response Act, which allows (but does not require) decision-makers to consider climate change targets in decisions. But it might not actually need to change, because s5ZO allows the "responsible Minister" - presumably the Minister for Climate Change - to issue guidance to departments on when and how to do that, including what to take into account. I was curious about whether the Minister had issued such guidance, or whether there was any under development, so I filed an OIA request with the Minister. The answer? Of course not:

I have not issued guidance under s5ZO of the Climate Change Response Act 2002 (CCRA) to date in my capacity as Minister of Climate Change.

If the Minister actually wants the law to be effective, maybe he should? And if he doesn't, then all his hand-wringing just smells like more insincere pretend helplessness...

The Greens, the media, and democracy

The big news over the weekend was that Green party delegates at their AGM voted to re-open nominations for James Shaw's co-leadership position, effectively toppling him as co-leader. I'm not a member of the Greens, so its not really my place to have an opinion on who should lead them - it is a decision for their membership, not for rubbernecking bystanders like me. But something I can have an opinion of is the reaction of Aotearoa's political journalists, who have variously characterised this as "disruptive", "destabilising", an "existential crisis", a "self-implo[sion]". Which paints a fairly unappealing picture of a journalist class which prefers autocracy over democracy, and for our party leaders to be unaccountable to their members. Which seems to be somewhat at odds with the values they present to the public for their self-proclaimed "fourth estate"...

Part of the problem seems to be that its an Outside Context Problem for the media. They're basicly courtiers, who primarily deal with and report on other courtiers. For them, leadership issues are resolved by cabals and conspiracies, BBQs and fish n' chip clubs, secret deals made by "Great Men" and "Great Women" - all of which have self-serving insiders who will give them the gossip to fulfil their own agendas. They're also used to an environment of cynicism, in which policies are just something you espouse to get power, rather than the other way round. Parties which actually stand for something, and which hold their leaders to account for their delivery, are therefore something of a challenge (which they usually dismiss by labelling such parties "naive", promoting cynicism as normal and desirable). And when the peasants just rise up like this, they just can't process it, other than to recognise it as different, and therefore Bad. Which again is a pretty suspicious attitude to take towards democracy and accountability, especially from people who purport to be its champions. And its a pretty suspicious attitude to take towards the idea of member-controlled political parties, which is apparent the moment you ask the question: if parties don't serve their members, who should they serve?

The problem here isn't that the Greens have "too much" democracy - its that other parties have too little. And our courtier journalists are institutionalised into thinking that this is normal and desirable.

As for claims that this will be electorally bad for the Greens, I doubt it. Its not as if any core Green voters are going to turned off by their party being democratic and its leaders accountable. As for non-core voters, they've been driven to the Greens by issues like climate change, inequality, water and housing, which the Greens focus on and the status quo parties are trying to ignore. Sadly, it seems unlikely that those issues are going to get any less pressing, or that the status quo parties are going to be any more convincing (and if they are, then it'll be by adopting green solutions, which most Greens would regard as a victory). Which leaves nebulous attitudes of "trust". But that goes right back to journalists viewing and presenting democracy as bad and untrustworthy...

The Greens will solve their leadership issue democratically, as they always do. Whoever emerges as co-leader will have the endorsement of the membership, as they should. This is a normal process for a democratic party. The voices portraying it as weird or bad are telling us far more about their own anti-democratic attitudes than they are about the Greens.

Climate Change: A quarter-billion dollar delay

Back in 2020, the government realised that the industrial allocations in the ETS - supposed to protect large polluters from unfair competition from countries who didn't pay for their carbon - was overallocated. They were giving away too many free credits, resulting in windfall gains to polluters. Having noticed this, the government promised to urgently fix this bleeding sore in public finances, which was costing $60 million a year.

...and then they did nothing. And then did more nothing. Last year, they finally started a review. And now, two and a half years, millions of tons of carbon, and something like $150 milion later, they've finally announced they will fix it. In 2024:

The Government is closing a $60m loophole that allows big polluters to make windfall gains.

Under the Emissions Trading Scheme, some heavy emitters get up to 90 per cent of their pollution credits free.

But outdated maths means some companies can earn up to three times the cost of their actual pollution– a loophole Climate Change Minister James Shaw has now promised to close starting in 2024.

...which means they'll be giving away more carbon, around another hundred millions dollars worth, before they fix it. A quarter of a billion dollars in total. No hurry, eh? And that's without even considering the decade of overallocation before that - another $600 million - or questions about what carbon price they're using (if they're using market prices rather than social costs, then it could easily be double that).

All up this colossal fuckup has cost us the thick end of a billion dollars (or double that), which has gone directly on the profits of these polluting companies. Normally that's the sort of thing that would agitate the current opposition, but because its gone to polluters they'll be whistling tunelessly over in the corner. Overpayments to polluters is also the sort of thing you'd expect to agitate the Greens, but because their Minister is in charge at the moment, they're not interested in accountability either. No-one in our political system is going to stand up for the public over this, and the polluters who benefited from this are going to be allowed to get away with it and laugh all the way to the bank.

They shouldn't be allowed to. When WINZ overpays a beneficiary, they take it back, clawing it out of future payments (or demanding weekly payments from those who have escaped them). We should apply the same approach to rich polluters: these overallocated credits should be reclaimed, either from future allocations, or directly from these companies' ETS accounts. That will not only give justice to the public - it will also restore integrity to the ETS by reducing the massive stockpile of credits.

Finally, it is clear that the government should have acted much faster to fix this. James Shaw owes us an explanation of why something supposedly so urgent took so long. Because while he didn't cause this problem - that's on National, and Nick Smith in particular - he is responsible for fixing it, and the length of time taken is definitely unacceptable.

Climate Change: The new emissions budget

The government today released its first three emissions budgets, covering the periods 2022-25, 2026-30, and 2031-35. The good news? They've reversed their ridiculous proposal to increase the first period budget because we were planting too many trees and soaking up too much carbon (no, it doesn't make sense, and MPI lied to them to justify it). And they've ground down later budgets by a few more megatonnes, setting a more ambitious long-term pathway. The bad news? They've baked in the Climate Commission's baseline scamming, effectively rewarding past failure by allowing more pollution. And as a result, it's going to take until the second period to get back below 1990 emissions levels (which we committed to do by 2012 at Kyoto).

It gets worse when we look at how the budgets interact with current policy. The government's commitment to shielding farmers from any responsibility for their pollution means that by the third period, they're going to be eating ~80% of the budget, meaning we will need to eliminate or offset ~75% of carbon dioxide emissions so farmers can enjoy subsidised pollution. We might actually be able to do this, but it isn't remotely like a proper sharing of the burden between urban and rural Aotearoa. Worse, the government's existing free allocation commitments are going to eat most of the amount left available for carbon dioxide, and by the fourth period, free allocations for agriculture and industry will likely exceed the total available budget. So the government is going to need to significantly reduce those on a quicker pathway if it doesn't want to create a long-term problem for itself. The good news is that they are currently reviewing industrial allocation, so hopefully we'll see some progress there.

Still, this at least gets the budgets in place. And once that's done, the challenge shifts firmly to meeting it. Except it doesn't. Because Shaw has framed the latter two budgets as "in principle", and says explicitly in his speech that they will be revised the year before coming into force seems contrary to the law and to undermine the certainty the Zero Carbon Act was meant to provide. The law requires that the government always be looking three budgets ahead, and while budgets can be revised, this is for exceptional circumstances, not a routine process. It does this so people can see the reduction pathway long in advance, and plan accordingly. And it does it precisely to avoid the uncertainty of every decision being made for political convenience at the last minute. Shaw is undermining his own core policy here, in a way which calls the entire Zero Carbon Act framework into question, and it will be fascinating to see whether this language is in the original briefing papers, or whether it was forced on him by Labour.

Climate Change: Will NZ end fossil fuels?

Good news: New Zealand apparently signed up with other countries to set an end date for fossil fuels:

A group of countries at the COP26 climate summit have committed to setting an end date for oil and gas exploration and extraction.

The alliance is led by Costa Rica and Denmark, and includes Ireland, France and Greenland.

New Zealand has joined the alliance as an associate member, as has the US state of California.

Aotearoa cannot have core status because of the ongoing provision of on-shore drilling permits, especially in Taranaki.

This sounds good, except just yesterday we had the unpleasant sight of James Shaw saying that the UN's call for countries to come back with more ambitious climate pledges next year somehow didn't apply to us - a statement which saw him win a well-deserved Fossil of the Day. So it's unclear if this is a real commitment, or just more PR from a duplicitous, fossil fuel-addicted government.

But what if it was real? It would mean we'd need to legislate to immediately stop issuing new exploration, prospecting and mining permits for fossils fuels, and to sunset existing permits (and the sooner, the better). There's a stab at what such legislation would look like here. Any MP serious about ending the fossil fuel industry in Aotearoa is welcome to put it in the ballot.

Climate Change: More dishonesty over the CCR

Last month the Emissions Trading Scheme turned into a farce, when the government flooded the market with credits in a failed and wasteful attempt to Keep Carbon Prices Low. When I asked about the background of this policy Climate Change Minister James Shaw sent me one of the most egregious "fuck you" responses to an OIA request I have ever seen:

I am withholding the remaining eight documents including the titles under section 18(d) of the Act because the information is or will soon be publicly available.

Another OIA later, and the titles have finally been released, and you can read the documents themselves here. So what didn't Shaw want me to see? Probably the advice in this paper that, having given assurances that any release of credits from the cost-containment reserve would be backed by emissions reductions elsewhere, actually the government doesn't think it needs to do that after all:

This is strictly, legally true. It is also exactly the sort of self-serving, "within the rules" bullshit that brings politicians into disrepute, undermines the credibility of our climate change policy, and which Shaw was supposed to put an end to in this area. Its especially dishonest and self-serving because the reason we don't have an emissions budget for 2021 is because the government legislated that there wouldn't be one. Meanwhile, the 7 million tons of pollution they have just allowed are real, and will be emitted at some stage over the lifetime of the ETS. So if the government wants the system to have any credibility, it needs to back them, ideally by ripping the full 7 million tons straight out of the 2022 and 2023 budgets. And if they can't do that by regulation, they should do it by legislation, at the same time as they abolish their failed price cap policy entirely.

Climate Change: Anatomy of a mistake

At the beginning of the month, the Emissions Trading Scheme turned into a farce, when the government flooded the market with credits in a failed and wasteful attempt to Keep Carbon Prices Low. This cost us a billion dollars while undermining the fundamental purpose of the ETS. So why did it happen? Pretty obviously, because the government set an important number, the Cost Containment Reserve trigger price, too low. I was curious about the reasons for this, so I asked Climate Change Minister James Shaw for the advice he had received on the matter. In response I received one of the most egregious "fuck you" responses to an OIA request I have ever seen:

I am withholding the remaining eight documents including the titles under section 18(d) of the Act because the information is or will soon be publicly available.

...which made it impossible to actually tell if the information was actually publicly available or not. Heckuva job, James. You're really complying with the Green Party's policy that "Politicians uphold high ethical standards [and] are open and accountable" there.

So what was the advice? Well, trawling through MfE's shitshow of a proactive release page for a while eventually led me to a May 2020 Regulatory Impact Statement on NZ ETS unit supply and price control settings regulations, which looks at the policy arguments on how that important number was set. MfE looked at four options for the CCR price trigger: $40, $50, $70, and $100. Important policy parameters were that the CCR should "help maintain NZU prices in line with other countries [to] prevent New Zealand’s emissions price from exceeding those in our potential linking partners and some of our major trading partners" and that it "should be set outside the expected cost of emissions abatement for meeting our targets, and therefore used rarely". The costs and benefits of the various options are laid out in a table and associated commentary on p69-71 for the usual Goldilocks exercise (dismiss the options at either end as extreme, setting up your preferred option as "just right").

The $40 price cap is immediately dismissed as too low as:

This would set the upper limit of New Zealand’s emissions price pathway too low to drive adequate levels of emissions reductions. It is probable that NZU prices will need to be able to rise above $40 over the PEB for net emissions to reduce in line with achieving the 2050 target.

The $100 price cap is likewise dismissed as being "too high", particularly because it might "allow an emissions price higher than what is required to achieve the 2050 target". That is, it might be effective, do more than the bare minimum, save the government from having to buy more expensive abatements internationally - not to mention consistent with the policy goal of price settings outside the expected market range, and therefore used rarely. But no, we can't be having that, so we're left with the middle options. Of which MfE chose the lower one, on the grounds that a trigger point of $70/ton was also "too high" and would allow emissions prices to rise to "unsustainable" levels, imposing "unacceptable costs on households and businesses". No, they don't bother to do any analysis of what might be "unacceptable", or to cost it against the cost of attempting to subsidise credit prices using the CCR, but from Treasury (p 66), we know that those costs would be around an extra $140 a year for the median household, and that the CCR costs around four times more than that.

So we're left with $50 - a price MfE notes is already roughly the same as that in the EU ETS (didn't they expect it to grow?) and lower than that in Korea, and which in reality was exceeded within six months. It also gave us the puzzling situation of a proposed $10 range for the market for five years - $40 being too low to produce required abatement, and $50 being the soft cap. And that alone seems like a recipe for disaster.

But the fundamental problem here is that MfE thought quite moderate carbon prices are bad, "unacceptable", "too high". And when you're designing a policy whose primary goal is higher carbon prices, that seems to doom you from the start.

All told this is very poor policy advice, and its no wonder Shaw wanted to keep it secret. After all, he signed off on this. The CCR and consequent seven million tons of extra emissions is his responsibility. And the worry is that he has learned nothing from it, and that the new price settings he announced last month are going to see this mistake repeated again next year.

Climate Change: Some "emergency"

Jacinda Ardern: 'Climate change is my generation's nuclear-free moment', Newshub, 20 August 2017:

In her campaign launch speech in Auckland on Sunday, Ms Ardern called climate change "my generation's nuclear free moment".

[...]

"There will always be those who say it's too difficult. There will be those who say we are too small, and that pollution and climate change are the price of progress," Ms Ardern said.

"They are wrong."

She says New Zealand has an opportunity to shape its identity by making the transition to reduced emissions.

"This is my generation's nuclear-free moment, and I am determined that we will tackle it head on."

Climate emergency declaration by New Zealand government includes commitment to 2025 targets, RNZ, 2 December 2020:

Prime Minister Jacinda Ardern has committed the government and the public sector to going carbon-neutral by 2025, as she declared a climate emergency.

Ardern has moved a motion in Parliament this afternoon which would see New Zealand join 32 other nations in formally acknowledging the global crisis.

The motion was passed shortly before 4pm, with Labour, the Greens and te Pāti Māori all voting in support, and National and ACT opposed.

Climate emergency declaration will be matched with long-term action, James Shaw, 2 December 2020:

Today’s climate emergency declaration will be backed with ambitious plans to reduce emissions, the Minister for Climate Change, James Shaw today.

“Our Government has put New Zealand at the forefront of climate action over the last three years. Declaring a climate emergency and backing this with long-term action to reduce emissions shows that we intend to stay there,” James Shaw said.

Next year, the Government will agree the first three emissions budgets required under the Zero Carbon Act, publish an emissions reduction plan to meet these budgets, consider updating New Zealand’s target under the Paris Agreement, and adopt a plan to meet our international obligations for the period 2021-2030.

Work on each of these is already underway.

Government’s climate plan delayed five months, Newsroom, 15 September 2021:

The Government's plan to tackle the climate crisis has been pushed back five months due to the Covid-19 pandemic and to align it with next year's budget, Climate Change Minister James Shaw announced on Wednesday.

The Zero Carbon Act currently requires the Government to release its Emissions Reduction Plan by the end of the year, but Shaw said the Government would move the deadline back to May 2022.

Urgent? Ambitious? An emergency? A nuclear-free moment? You be the judge. Meanwhile, you might want to throw some money at Extinction Rebellion, 350, Greenpeace, Generation Zero, Lawyers for Climate Action, or any of the other groups who are campaigning on this, to help them oppose it.

Climate Change: The CCR is a failed, counterproductive policy

Writing on Interest, and in the context of carbon farming displacing traditional sheep and beef farming, Keith Woodford says:

Given that this year’s cost-containment reserve is already exhausted, there is considerable speculation as to what will happen as soon as the next auction on 1 December. The Government will need to find some more firepower if it wants to put a lid on current prices.

To which the obvious response is "but why would it want to do that?" Because its clear from the progress of the ETS this year that the attempt to limit prices is both a failed policy, and completely counterproductive. Failed, because it did not work, and will not work; prices are already well above the government's $50 cap (set back in 2019, which is literally the dark ages for this area of policy), and the market clearly expects the CCR to trigger again at the first auction next year, meaning it will not control prices then either. Counterproductive because the cost of these failed attempts to limit prices is to allow more pollution, at a social cost significantly higher than any conceivable benefit, while even if it was successful it would mute the price signal and incentive for decarbonisation which is supposed to be the outcome of the policy.

So what should the government do with this failed, counterproductive policy? Abandon it. Not the ETS itself, which is producing a strong incentive to decarbonise despite the government's attempts to hobble it, but the idea of trying to cap prices. And the simplest way to do this, and one explicitly contemplated in law, is to set the cost containment reserve volume to zero (alternatively, it could be set to a much smaller amount, with a much, much higher trigger price to let the market find its level, but why piss about with half measures? If you want to end price limits, end price limits).

Unfortunately, Climate Change Minister James Shaw has already decided price settings for next year, which bake in the failure. Given that they will not work, are counterproductive, and are already being ignored by the market, he should reissue them. If the normal regulation timeline doesn't allow that, he should pursue urgent legislation to overwrite them instead. But with the clear and growing severity of the climate crisis, we cannot afford to pursue this failed, counterproductive policy. And we cannot afford to permit an extra 7 million tons of emissions every year doing so.

Climate Change: Fixing the government's fuckup

Newsroom today has a piece on the ETS price crisis and the risk that poor market design means we will blow the carbon budget in its first real year of operation. But can we do anything about it? According to Climate Change Minister James Shaw, the answer is "no":

As the price nears $50, the trigger level for releasing a flood of new units into the market to depress the carbon price, the Government says its hands are tied about raising the cap this year.

Climate Change Minister James Shaw told Newsroom he'd been advised that he couldn't raise that $50 cap until the end of the calendar year. Given the speed at which prices are rising, the threshold is likely to be breached well before then - possibly in the next government auction, scheduled for September 1.

Bullshit. To point out the obvious, the government could legislate. I've taken a first stab at what a bill to do this would look like here. It is basicly a simple matter of changing one column of numbers in a schedule. The numbers I've chosen are higher, designed to give the market room to grow and find its price, while setting a clear pathway to a price of $150 by 2030. Note that the price cap is a maximum price; you would expect it to be significantly higher than the usual market price, and I'm actually worried that the rate of growth isn't enough (it would imply a trigger point of $235 in 2030, and I'm not sure that 50% headroom over the expected price is enough to cope with regular market variations). But whether the rate of increase should be $15, $20, or $25 a year is something we have a little time to work out - the important thing is to solve the current problem so the market can actually do its work.

The timeframe to pass this is narrow - the next auction is on 1 September. Given the significant environmental (and fiscal) implications of doing nothing, all-stages urgency seems justified, just as it would be for a tax-legislation fuckup. And that's what this is: a fuckup, which needs to be fixed ASAP.