Tuesday, May 27, 2008

Climate change: the Greens on the ETS

Following the government's cowardly backdown on the climate change, the Greens made it clear that they would not support an environmentally compromised ETS. Speaking on Nine To Noon this morning, Green co-leader Jeanette Fitzsimons clarified those comments, laying out the conditions they need to support the bill [audio]. They boil down to two things: the ETS must be made fairer, and it must be made more effective.

On the fairness front, the Greens want to see some movement on agriculture. Currently, the rest of us are looking at subsidising farmers to pollute until at least 2030, at a cost of almost a billion dollars a year. The "polluter pays" principle, and simple fairness, demand that farmers pay the costs of those emissions themselves (and its not as if they can't afford it). The Greens recognise that the agriculture sector needs to be eased in, and so are suggesting an early entry of fertiliser into the scheme, or a requirement for new farms or dairy conversions to cover costs initially until the full entry of agriculture in 2013. The former would be far more effective and easier to manage than the latter, especially given that fertiliser is the area where there seems to be real potential for emissions reductions.

Early entry for part of the agriculture sector would also boost the effectiveness of the scheme, but the Greens also want the government to reverse its decision to delay the entry of transport, and instead have a staged entry, with oil companies responsible for 30% of their emissions in 2009, 60% in 2010, and 100% in 2011. This was estimated to add 2 cents a litre to the cost of petrol per year, spreading out the cost and avoiding a large, one-off shock. It's a good idea, and one I hope the government will consider.

Unfortunately, it's looking like the government will have a difficult task ahead of them. In order to pass the bill, they need to cobble together a deal between the Greens and NZ First. But while the latter seem receptive (especially since the government is now talking about recycling revenue to compensate those worst affected - something they should have been doing a long time ago), they're probably not going to want to see it strengthened, especially in the area of agriculture. So, the bill may yet fail.

The other interesting point is that the Greens hinted they might try and renegotiate the ETS in the wake of the election as part of coalition talks. So this issue isn't going to go away, and the government (whoever they are after November) is not just going to be able to ignore it.