Tuesday, May 22, 2007

Climate change: teaming up with California?

The Herald yesterday reported that New Zealand has been invited to join the Western Regional Climate Action Initiative, an alliance of five six Western US states plus British Columbia to establish an emissions trading market. The arrangement is similar to the Regional Greenhouse Gas Initiative operating in New England and the Northeast US. But while I'd like to see any New Zealand emissions trading plan integrated with international markets, there is one problem: the WRCAI's market isn't expected to go live until 2012. Wheras if we are to begin meeting our obligations under the Kyoto Protocol, we need something working by the end of the year.

(And on that front, David Parker's comment that a decision on emissions trading is due in "three to four months" is not a good sign. That's going to be cutting it very fine indeed if we want to have a partial market running for the beginning of Kyoto's first Commitment Period on January 1)

This doesn't mean we won't eventually end up in the same market, though. Emissions trading systems depend crucially on two things: a unit of emissions (which seems to be being standardised on tons of CO2-equivalent), and a system for measuring emissions and certifying reductions. It's a good idea, if we can, to work towards compatibility with other markets on these issues, and the sort of progressive implementation we are planning should help here. Eventualy, I'd expect us to end up with a local market, and a bunch of agreements to recognise credits from other markets as well. Which should allow New Zealand emitters both to pursue the mythical low-cost emissions reductions overseas, or to act as them for other, larger jurisdictions.