Wednesday, July 15, 2009

Climate change: meeting the target

At the moment the government is consulting on its 2020 target for reducing greenhouse gas emissions. In the face of overwhelming public support at the meetings for deep cuts, they have responded by demanding that the public do their job for them and explain where those cuts are going to come from. It's an abdication of responsibility, but it is also disingenuous, because the government already has the tool to achieve the desired cuts: the Emissions Trading Scheme.

For those who don't know, the ETS works by establishing a cap on emissions, and issuing permits to the level of that cap. Every year, polluters must hand over enough permits to the government to cover their emissions, or get a whopping fine. Polluters can buy and sell permits off each other, and from the international market, so reductions happen where they are cheapest. In other words, once you set the target, the market sorts out all the details.

From that capsule description, it is very clear that if the government wants to achieve an arbitrary reduction (say, 40% from 1990), all it has to do is set the cap at an appropriate level. And that's it. It is that simple. Polluters will either cut their emissions, or buy permits on the international market to cover the excess - meaning that someone else cuts their emissions. Either way, global emissions are reduced, and the New Zealand government meets its international obligation. Cut the cap, and the market will sort it out.

So, no more pretending that there is no solution or that the environmental movement must provide it. The government already has one, and it has nowhere to hide. And if they don't want to use it, the onus is on them to explain why.