Friday, June 22, 2007

Climate change: a goal?

Climate change minister David Parker has given us the first hint of the government's new climate change goal. unfortunately its not very impressive. Under the Kyoto Protocol New Zealand has promised the international community that we will reduce our net CO2-equivalent emissions to 1990 levels by 2012. According to last year's Projected Balance of Units, we are likely to exceed that traget by 41.2 MTCO2-e over 5 years. Parker's goal is to halve that, to a deficit of around 20 MTCO2-e. So, despite promising no growth in emissions, we will in fact be delivering a 7% increase. We will cover it through international emissions trading, of course, at a cost of around NZ$300 million (if you believe Treasury; twice that is more likely) - but it still leaves a bad taste in the mouth.

This is where seventeen years of no policy and lowering the bar has left us: in a $600 million hole, having to buy emissions reductions on the international market. If we'd acted early, we could have spent less money than that shifting our emissions profile, reducing our costs while ensuring that the benefits flowed to New Zealand rather than Russia or China. But its too late for that now.

Finally, thanks to the current dairy boom, Parker is concerned that we may not meet even this lax target - which again shows the importance of tackling agricultural emissions if we are ever to get this problem under control. But I'd say that the ball is entirely in his court. And if he delivers a lax policy which allows a higher level of emissions, then he can hardly complain about the outcome.


New Zealand is one of the most efficient places to produce milk powder in the world. We do not have to shove our cows into heated barns in the winter or feed them inefficiently grown grain. Where is the logic in cutting production here so that more polluting places find it more profitable to have more cows, the AGW pollution that they produce will effect us anyways? Isn't the point about reducing global emmissions contributing to global warming to make as many efficiency gains as possible on a global basis, which in the case of dairy means moving as much as possible of the production here?

Posted by unaha-closp : 6/22/2007 02:47:00 PM

Sure - but the fact remains that regardless of how efficient they are, our cows still produce methane and nitrous oxide. And they should be paying for it. We can not afford, globally or nationally, to have "sacred cows" or let any polluter have a free ride.

(And to get all hard and flinty and right wing on it, the fact that these polluters do not bear the full social costs of their activities leads to a misallocation of resources and inefficiencies. The right were happy enough to spout that shit when it came to slashing jobs and imposing user charges. It's time they swallowed some of it for a change).

Posted by Idiot/Savant : 6/22/2007 03:01:00 PM

Au contrare. Globally we can't afford to let any polluter have a free ride, but it has to be a global system or it does not work. As however no global system exists, then nationally we cannot afford to drive dairy production off-shore by the imposition of a NZ only levy. If each reduction in dairy emmissions here results in an increase in total emmissions we cannot afford to make those cuts.

Placing a tax on our cows would be exactly the same as the Japanese placing a tax on their pick-up trucks (light and efficient) and then selling them around the world in competition with American pick-up trucks (heavy and inefficient).

Posted by unaha-closp : 6/22/2007 04:02:00 PM

"Globally we can't afford to let any polluter have a free ride, but it has to be a global system or it does not work. As however no global system exists,"

Well, actually, the Kyoto protocol is that mechanism. It doesn't specify all the way down to the industry level what the emissions reducing policies should be, but it does set national targets. To meet those targets either the other dairy producing countries regulate their own industries to acheive those national reductions overall, or if they fail to regulate their dairy farmers, they must disproportionately penalise another industry or penalise all their taxpayers by having to purchase emissions credits internationally (for instance, this is the situation NZ is in). Either way, this response by the overseas country benefits the NZ industries whose overseas counterparts are being disproportionately affected, or benefits NZ emissions-abating industries and carbon sinks who can fetch a higher price for their emissions credits.

From a NZ dairy farmers point of view, this kind of situation might be bad news, but taking a national perspective its not all bad news for NZ. This situation - where the UK, say, doesn't regulate dairy but imposes stronger regulation in other industries or buys more emissions credits internationally - seems to be analogous to a simple production subsidy for the industry in question. And, so long as the presence of the subsidy isn't affecting the total emissions of the Kyoto signatories, we should probably be saying "dumb idea on your behalf, but we'll take your cheap subsidised goods, thanks". As long as the UK meets its emissions target overall, or buys credits for the difference, we can be happily indifferent about whether its doing so in precisely the same industry-specific pattern as NZ does, because we know that losses for one sector in NZ (dairy) will be made up for by gains in another.

Now, we live in a not-fully-covered-by-Kyoto world, meaning that regulating our dairy might be a bad idea even just from a net emissions point of view, let alone a national welfare perspective. The reason is that production will shift to more emissions inefficient places (Australia, say).

But I'm not sure about the merits of the implicit argument that if at least one other country fails to regulate its dairy emissions as strongly as NZ (hopefully) will, then NZ should forget about regulating it altogether. This is how a 'race to the bottom' comes about, and if we all abandoned our own emissions reduction targets then we're back in a business as usual situation, ie "square 1". Its probably a false dichotomy to present the decision as between simply "regulate own dairy industry" and "don't regulate own dairy industry". This is because the second option could be augmented with things like border taxes, or increased political pressure, or any other instruments we can think of, which may give a better long run emissions outcome than the business as usual case.

So regulating our own emissions, plus pressuring the international treaty shirkers, will lead to lower net emissions than the business as usual case. And the comparison with the BAU case is the one implicitly suggested by those who say that "because Australia isn't in, we shouldn't be either", or similar statements to the same effect.

Posted by Anonymous : 6/22/2007 05:23:00 PM


To arbitarily regulate our own dairy production whilst having the best conditions for enviromentally friendly dairy production is momumentally stupid. If we were to indulge in a perfect world scenario all dairy production would take place in temperate zones like our own to minimize its enviromental impact. We want as much dairy production to occur here as possible. To arbitarily penalise dairy production here will be a damaging action that increases AGW.

"From a NZ dairy farmers point of view, this kind of situation might be bad news, but taking a national perspective its not all bad news for NZ."

NZ's wellbeing is irrelevent to this discussion, to move dairy production offshore to colder climates increases the production of greenhouse gases - through the necessity to house cows and feed grains. To apply Kyoto to the NZ dairy industry is to adopt a NIMBYist approach to a global problem. This has never been a local issue it is a global problem.

We cannot afford to wait until mays or ifs occur in the "long run", global warming is occuring now, we need to reduce greenhose gas production now. To send production offshore is to increase the production of AGW gases.

Posted by unaha-closp : 6/23/2007 11:31:00 PM

I have often wondered, how the CO2e of the cow emissions is calculted. Considering of course that all cow emissions (CO2 from respiration and CH4 from digestion) were already present in the atmosphere. I'm not talking about the emissions associated with farming practises, but those of the cow, specificaly CH4, which gets a lot of attention. Is it, as I beleive it should be, the relative radiative forcing of the CH4 to the (original) CO2, for the life time of the CH4 (before it is oxidised back to CO2). Is there adjustment for the time that C is locked up (out of the atmosphere, as in a tree) in the cow's biomass.

unaha-closp is spot on taking a global approach to this issue, instead of talking about gross emissions, these should be considered in a global context. People want to drink the milk of cows, fact. We should produce this in the lowest impact manner possible. NZ should get credit for having relativly low emissions per liter of milk produced, not get taxed for gross CH4 emissions. but we should get taxed for having, for example, a shitty public transport system.

Posted by Anonymous : 6/24/2007 09:08:00 AM