Friday, October 29, 2021

Climate Change: New Zealand's biggest climate criminals

Today the Environmental protection Agency released its first ETS Participant Emissions report required by the Climate Change Response Act. Effectively its a list of New Zealand's biggest polluters, though because of the ETS sets the point of obligation - where people have to pay - very high up, it is mostly a list of oil, gas and coal companies (responsible for importing or mining fossil fuels). But we can learn some interesting things from the sections on industrial polluters, and on voluntary participants and removals. There's also some interesting data to be gleaned from the allocation decisions, though these are a) a year out of date; and b) frustratingly not aligned with emissions data - emissions run on June years, while free allocations are dished out for January - December. Still, there's some interesting data in there. For example:

  • The agriculture sector are New Zealand's biggest climate scammers. 34,254,357 tons of monitored emissions in 2020-21, and they're not paying a cent for them. This includes over 12 million tons from Fonterra, nearly 4 million tons from Silver Fern Farms, 2.5 million tons each from Affco and Alliance, and a bunch of other million-ton companies (including of course climate villains Ravensdown, whose fertiliser pollution enables so much of the rest). They've got away with not paying for their pollution for nearly a decade - they were originally meant to be in the ETS from 2012 - and the market cost of their emissions is over $2 billion a year. Its time they paid their way.
  • Methanex is New Zealand's second biggest climate scammer. We gave it 1,181,995 tons of free carbon in 2020, ostensibly on the basis that it turns gas into methanol, but then we also gave it 2,299,235 tons for exporting said methanol (which contains carbon). As noted above, those numbers are not quite aligned, but suggest we're giving it around 3 million tons a year, with a market value of ~$200 million (and a social cost of $450 million). Methanex values its contribution to the NZ economy at $84 million a year. The subsidy currently has a market value of just under $200 million, so over twice that (and more than five times as much using the government's internal carbon price of $150 / ton). The conclusion: we are better off shutting them down and keeping the carbon in the ground.
  • Tiwai Point is New Zealand's third biggest climate scammer. We subsidised this by 1,558,268 tons in 2020, while its 2020-21 emissions were just 637,130 tons. So we're giving them 900,000 tons (about $60 million) more than we need to. The "justification" for this is to compensate them for the higher prices caused by the ETS - except they're not paying those prices, and instead the rest of us are collectively paying another $350 million a year to subsidise their power.
This is the crudest use of the statistics, of course. But next year we'll be able to go beyond just naming and shaming the biggest polluters, and start looking at who is reducing emissions and who is increasing them. And therefore, whether the ETS is working or not.