Thursday, December 23, 2010

Climate change: Look who's reviewing our ETS

When the then-Labour government passed the Emissions Trading Scheme back in 2008, it included a requirement for five-yearly reviews to investigate allocation and recommend any changes. The first of those reviews is due by the end of next year, and the government has just appointed the review panel. So who have they appointed? A bunch of farmers and forestry representatives. So much for a review we can have confidence in.

Browsing the terms of reference [PDF], a key question is:

whether the NZ ETS should continue to scale up to a full obligation and whether new sectors should incur surrender obligations on current legislated timetables after 2012, taking into account the domestic actions of key competitors, or what conditions should be met before proceeding with further sectors entering into the ETS
So the government wants their strapped-chicken review to "independently" recommend the retention of the current 50% pollution subsidy and the continued exclusion of our biggest source of pollution, agriculture. The latter amounts to an effective subsidy of $870 million a year at present (using National's estimated carbon price of NZ$25 / ton), and twice that from 2013 (using their estimated post-2012 price of NZ$50 per ton). And that is not something New Zealand, or the environment, can afford.