Tuesday, June 02, 2020

Climate Change: Banking failure

The government announced more changes to the ETS today, including to the emissions budget for 2021 - 2025. The overall budget for that period will stay at 354 million tons of CO2-equivalent. But the ETS component of that - stockpile reduction, free allocation, and credits to be auctioned - budget will increase to 160 million tons:
[Graph by the Ministry of the Environment from here]

This is an increase of 10 million tons from what was proposed in the consultation document. Comparing the two, 10 million tons has been moved from "emissions outside the ETS" to auction volume. Which would be fine if it was because farmers are suddenly going to have to pay for those emissions. But they're not - agriculture isn't coming into the scheme until 2025. So what's going on? Well, if you go and look at the government's latest net position report, agricultural emissions over 2021 - 25 are expected to decrease due to land-use changes. The scale of that decrease? Just over 10 million tons. But rather than banking that success - or just going "agriculture will do what its going to do, and its outside the ETS so it doesn't matter for this calculation" - they've instead given that projected saving straight to industrial polluters, who were not expected to increase their emissions to compensate (and were in fact projected to have a net reduction as well, but now can be expected not to because they will have the credits to pollute). They've taken success, and turned it into failure. Meanwhile, if agricultural trends reverse, and their projected emissions increase again, we've already locked in higher emissions through the allocation budget, and we will blow our first carbon budget, and make it that much harder to meet our 2050 "net-zero-but-not-really" target.

Heckuva job they're doing there. Aren't you glad the Green voice in government is ratcheting down emissions?