How emissions policy could destroy the economy
While it seems there are enough new trees growing to offset our increased carbon emissions for the first Kyoto commitment period from 2008-2012 – big questions remain for the future, especially for agriculture.
Climate change minister Nick Smith has essentially vetoed the very public push by the Green party to reduce carbon emissions by 40% of 1990 levels by 2020 pointing to a direct cost to the economy of around $15 billion.
A reduction target of that size would “obliterate the economy” according to Federated Farmers president Don Nicolson.
“To be green you have to be in the black.
“While one fringe group is asking for an emissions reduction of 40%, the real effort required is more like a 62% reduction. What that group wants is greenicide, which would obliterate the economy,” he said.
While New Zealand’s carbon emissions have increased by about 24% since 1990, the first report from the Land Use Carbon Analysis System (LUCAS) has revealed that post 1989 forest plantings are sufficient to offset the increase for the first Kyoto commitment period. However, these trees will mostly be out of the picture by 2020 as they are harvested.
The government now needs to announce a 2020 reduction target before the next climate change talks in Bonn, Germany, on August 10 ahead of the United Nations Climate Change Conference at Copenhagen, Denmark, in December.
Under Kyoto, New Zealand has committed to reduce its emissions to 50% of pre-1990 levels by 2050.
There is uncertainty concerning the Denmark summit. The overarching point of the meeting is to negotiate a global climate change policy. If that happens, then the next issue will be New Zealand’s allocation of Assigned Amount Units (AAUs). Following that, New Zealand will need to reduce emissions to AAU levels or buy emissions units from other countries, or both.
With the latest data out suggesting we have offset our increase in emissions for the first commitment period, New Zealand now has to set a fresh target for the second.
Given that the government has said that agriculture, which is estimated to contribute nearly 50% of New Zealand’s greenhouse gases, will be part of any future policy, contrary to policies in most other countries – there are some significant unknown variables, such as when the sector will be included in any future scheme and, more importantly, how much it will cost.
Dr Smith said New Zealand has significant decisions to make the 2020 target and also on emissions trading that will have major environmental and economic consequences for many years go come.
Joint research by the NZ Institute of Economic Research and Infometrics outlines costs based per capital for 2020 emissions targets. If the Greens got their way and a 40% reduction was aimed for, it could cost each New Zealand $3000 each year. A 15% reduction is estimated to cost $1400.
Agriculture has limited means to mitigate emissions although technology is starting to filter through. For most countries, agriculture is excluded because it’s a necessary activity required for domestic food consumption. It’s different for New Zealand because agriculture reflects a huge part of export revenue.
Dr Smith told TVNZ this week that New Zealand’s agriculture emissions profile looks more like that of a developing country.
“That’s why the government is putting a lot of emphasis around this idea of an international research consortium,” he said.
Agriculture minister David Carter earlier told NBR that this concept is getting some traction in Europe and there is interest in New Zealand’s lead on this issue.
Mr Nicholson has described the race to set a 2020 emissions reduction target as a political gesture.
“The real emissions targets will be set by international negotiation, not the aspirational targets being batted around at the moment,” he said.
“Targets are an unhelpful distraction from the business of farming. While self-important people tell us what is supposedly good for us, farmers get up each morning and go to work to bring money into the New Zealand economy.”
Submissions on climate change policy close at the end of this week.
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Comments and questions34
in 2050 after the western world had given up on the market economy and reverted to subsistence farming practises.. history books showed a sorry story. in 2020 after several attempts at shadowy financial instruments.. first there was junk bonds, then there was toxic debt .. then carbon bonds. The Carbon Bonds were traded and a market created. A few Wall St guys enjoyed a long stay in custody attempting to explain how they sold " virtual" carbon credits on a futures market. War broke out when the debt collector came calling.. wheres the trees asked the man from Deloittes... what trees asked the farmer... they were sold 20 years ago ..harvested and shipped off ..the farmer scratched his head..when will they ever learn.
Seems the NZIER and Infometrics and Federated Farmers have over-egged the economic impact of pricing emissions pollution.
Turns out the $3000 per household cost is based on assuming the carbin price hits $200 per tonne. A far cry from the NZ$54 per tonne predicted by the Congressional Budget Office its assessment of emissions trading. This information comes via the NZ Business Council for Sustainable Development today. worth a read I think at http://www.nzbcsd.org.nz/story.asp?StoryID=1009
Don must be in shock> Or maybe, like others, he hasn't noticed that Nick Smith on Q and A Sunday rejkected Don's campaign to exclude agriculture from an ETS. In fact, said there will be an ETS and agriculture will be in it. and our goods could face tariffs from the USA and others if we don't price our emissions.
Key and Smith may not want to read all the material which casts major doubts on the "evidence" that global warming is significantly due to man but Ian Wishart's "Air Con" provides a good summary of the various arguments. It's a good source-material book.
We need to stand against the chicken littles of this new religion before our economy is killed.
Why doesn't Key look out the window and see the cause of global warming?
Save us from another ruinous government!
Dufus comment - so-called developed countries pay farmers not to farm, and in so doing reduce emissions drastically. NZ farmers farm for a profit, so of course burn diesel, and would surely burn sunflower oil instead if it burnt more cheaply. Its a shame Dr. smith could not be more balanced on this point, which although minor certainly got my feathers ruffled as it points to the common Wellington Beehive Ostrich Syndrome. And a blind Ostrich at that.
I read in the Christchurch Press today there is now a peer reviewed scientific report pointing categorically to the fact that global warming, even if it exists, is not a man made phenomenon, and all of these climate change taxes are going to nothing, repeat, nothing, other than further destroy our productive sector, while chaining us to the state.
What a rort. Governments around the world have to wake up to how utterly irresponsible they're being pushing these taxes on their populaces.
We truly are ruled by morons, and I would say we deserve everything we get, only, I didn't vote for any of this lot.
Without getting into too much detail here, the estimate is that green taxes would "cost" every man woman and child $3000. And the money goes where? into jobs? back into government spend? This doesn't sound to me like the end of the economy so much as the return of the Keyensian economy: which did us quite nicely after the Great Depression.
Or are Smith and Co still staunchly defending Friedmanism after all its done for us??
When will Nick Smith and his cohorts ask the fundamental questions? Like what factual evidence is there that CO2 has any significant impact on climate? Given that CO2 levels have been 20 times higher during ice ages.
Like what is the issue with a warming world? I prefer it to be warm and I defy anyone to prefer cold to warm. The 'green' seems to be be frightened of sea level change - but it has done for millions of years. What factual evidence is there of sea level rise since 1976?
Why do we have to bow to peer pressure, when it is clear to anyone who has read up on the subject, that Global Warming is a scam?
Good grief, if we could predict the weather two weeks out using computer models image it would be a first - what chance of predicting the climate 100 years ahead? time to get your head out of the sand, Nick.
Here's my prediction - based on past natural climate cycles - the world is getting cooler and will do so till around 2030. If the sun continues to show little sign of livening up, then cool may become cold - and then we really will have a problem.
Governments in this world will have to decide between destroying the economy or the world. They need to remove their blinkered visions and look further afield.
Pulling stray facts out for us and claiming they 'disprove' the climate change that has been widely accepted by the scientific community is a silly activity. If you lot have such convincing evidence, go get those scientists to recant.
If you cannot do so, it makes me wonder about the merits of your position. Stop trying to convince me, I know f all about meteorology AND climate change, which are reportedly totally different fields of expertise.
If you keep bleating at those of us who cannot assess your claims, it will soon become apparent that you are all loony conspiracy theorists. In fact, it pretty much IS apparent.
The world is going to impose some sort of carbon management programme. Why don't you do something constructive and ensure it is an effective programme?
Pulling stray facts out for us and claiming they 'disprove' the climate change that has been widely accepted by the scientific community is a silly activity. If you lot have such convincing evidence, go get those scientists to recant.
If you cannot do so, it makes me wonder about the merits of your position. Stop trying to convince me, I know f all about meteorology AND climate change, which are reportedly totally different fields of expertise.
If you keep bleating at those of us who cannot assess your claims, it will soon become apparent that you are all loony conspiracy theorists. In fact, it pretty much IS apparent.
The world is going to impose some sort of carbon management programme. Why don't you do something constructive and ensure it is an effective programme?
I think you will find that the issue is no longer 'global warming', but 'climate change'. We have now for a number of years resigned ourselves to the fact that we don't really know how the weather and climatre are going to change as a result of our human actions. but we do know that they will, we are already seeing the evidence and the catastrophic effects. Do you want to live in a warmer world or a desert? Maybe you'd fancy an ice age, or better still, to flood half the cities in the world with the sea? I have just completed a Masters in the subject and I can assure you, it is not a scam. Are you scared? Are you a scientist? Or are you just utterly deluded and self-absorbed? If you bury your head in the sand, you deserve a kick up the a**e. Wake up!
Unfortunately, the bulk of science consensus is that the world needs a 75% reduction in emissions.
Some forecasts indicate that a 4 degree warming will result in most of Africa, Europe, USA, China and Australia becoming desert (literally uninhabitable). While the polar regions will become habitable, trying to get everyone to move there harmoniously is going to be politically difficult. Plus, rebuilding all your cities on other continents does not come cheap, either. And if this happens, it will all be high-density high-rise as well, unless we somehow manage to shed 4-5 billion people or so...
One paper does not the truth make. If it were that simple, all of the thousands of other papers would agree.
Debs - the so called facts about climate change are not widely accepted by the scientific community. There has been a number of high ranking scientists who as soon as they retire or move from "connected" positions have publically stated they don't believe the IPCC reports.( They did not speak out earlier because of risks to their reserach funding etc. ) There was an open letter signed by several thousand scientists who were against the conclusions reached ( a larger number than those who signed the IPCC report ).
This issue is now more about money and politics than the enviroment. The wise guys can see huge amounts of money to be made in carbon trading.
I personally am all for cleaning up our environment and all for looking alternative energy sources but emiisions trading schemes are not going to do anything useful except make a few people a bit better off , financially.
Liam's headline is r-e-a-l-l-y overstating things! Just by way of illustration, when a nation commits itself to, say, a highway system the cost per man woman and child is always cited. But money goes around and the pump is primed - perhaps there's some redistribution of wealth too, and they may or may not be always good. But even if the cited cost per person (as guesstimated in the reports) of a carbon neutral scheme were as high as quoted, the money invested in more planting, more sustainability etc might be a really good investment - regardless of the scientific arguments of climate change. A kind of "Think Big" but without all the money actually going off to General Electric in the USA.
What we have here is world politicians who need some bogeyman to save us from, to justify their existence.Scientists who need sources of funding to keep themselves in a job, and polical funding is the be tof all. Very little accountability, unlike commercial funders who expect to see an outcome. "Activists" such as Christina above, who need a philosophy to attach themselves to. The world has seen rows of them, ban-the-bomb, burn-the-bra, and so on. Lastly, a Media system who also desperately needs bad news to sell themseves with. We don't have any new Wars brewing up. Swine flu has burnt out, and this debate could go on for years yet, so its ideal.
But in the process, the risk is that we are going to see our fragile econmy totally wrecked by these lunatic approaches to solving a problem that does not exist. There are more real Scientific reports showing that the world teperatures have fallen in the past few year, giving good logical evidence of the various reasons for that., than there are Scientists who just regurgitate each others "assessments" of climate change. Based almost totally on computer modelling and using unproven baseline information.
I don't think NBR is running the story purely to sell more copies (or online subs) and I don't think people like Christina are simply looking around - as you suggest - for a philosophy to attach themselves to. That view strikes me as somewaht jaded. But what we are seeing is a society (not just NZ) reaching some kind of evidentiary crossroads and proving itself not very good at knowing how to reach a conclusion. Its like a jury reaching some point where the jurors start yelling at each other - not particularly constructive, not a good process at reaching any kind of conclusion ...but certainly a reflection that we've reached some complex impasse.
How exactly does NZ, or the greater human community, work out a course of action in the face of a good pile of evidence which says "guys - there may be a problem here."
The jury is out, but it has to work out a smooth way to go forward. Name calling isn't going to help prosecute the matter.
I'm not sure, Footplate, but perhaps the answer lies in Wishart being a crackpot and the government's will to accept the majority opinion of scientists.
Of course the climate will change! The climate gas always changed. If it wasn't for climate change, Europe would never have been settled, and agricultural surpluses would never have lead to the technological benefits that we enjoy today. America would never have been settled, and we wouldn't have polar bears or camels........animals and humans have continually adapted to climate change.
We can do NOTHING about climate change...we should focus on reducing waste.....not the ETS.
We are at temperatures world wide equal to 1980 CO2 is irrelevant. A 15 year old with modest intelligence an internet connection and an hour to spend will see AGW for what it is, the greatest scam in history.Visit http://scienceandpublicpolicy.org/originals/climate_money.html
http://www.drroyspencer.com/latest-global-temperatures/
Take a look at what Smith and his rent seekers want to do to Palmerston North
www.palmerston-north.info
I merely cite Wishart's gathering references to research. He is clearly no scientist - though that is not necessarily a weakness. Scientist are the same as the rest of - tow the line that puts bread on the table. But there are many others - Monkton comes to mind - that try to cut through the chicken little hysteria of the global warmers. You don't have to like Wishart but you could at least look at the sources he quotes. Quotes, I emphasis.
Duncan Hamilton I am no scientist but can anyone tell me why we in Auckland are having the coldest wintrer since 1974, the year after the Yom Kippur war (please excuse the spelling).
I have not seen any convincing facts that Auckland's climate is warming - certainly not in winter. So what is all the fuss about carbon etc. As other people have said recently it sounds more like the Y2K scare at the turn of the century
Duncan, I was not pointing at NBR in this case, more the wider Media fellowship who keep talking of climate change as if there are no questions about it.
If Al Gore can admit to exagerating the truth, then you can allow me to at least generalise a little to highlight the broad parameters of those who are following his same path.
And how come the private forest of NZ appear in NZ's Carbon Credit Bank I ask, who planted the bloody things in the first place ... with one big stroke of the pen Comrade Helen and her cronies stole them.
Nothing if not prolific, Duncan!
See my post on the previous Cycleway article.
Is this the Duncan Smith of Cleverbastards?
Why are we obsessed with this? I am overseas at the moment and there seems no popular debate. The science is mixed so let's just say no until it suits us to do otherwise. Let's get as cynical as everyone else.
This entire subject is so full of controversy. But the facts cannot be denied. The trend for average Ocean temperatures are warming, and the warming is rising sea levels. The last major El Nino event in 1998 was a dramatic 2.5c above average. What will the next major El Nino event be?
http://www.slideshare.net/21000centuryrevolution/graph-of-el-nino-weather-phenomenon
I am aghast that there are still people who deny that even global warming is taking place.
As for those that say that this is a natural event and nothing can be done to prevent it. What century are they living in?
Who took their pile of evidence (or, in the case of the "Cold Auckland" bleater, their little tiny one off factoid) over to the scientists and made a convincing case to the experts?
"People change when they retire" doesn't suggest that you have an overwhelming case that climate change is a fraud.
And, btw I have some cheap preY2k devices that have had no updates made to their software - anyone buying? Y2K didn't happen because we ignored both the asses who claimed that it didn't matter AND those who went and camped in the desert.
Understand the system and manage it.
Climate Change will destroy the economy
I don't see why people seem to ignore the simple truth about greenhouse gases...there are several gases that keep our planet warm and inhabitable; water vapour, carbon dioxide, methan, and nitrous oxide are the main ones.
In atmospheric physics it is a basic and well known fact that these gases are what keep our planet at an average temperature of about 15°C. Now this is proven, basically if you can disprove this you will win a Noble Prize. Without these gases our planet would be, on average, about -15°C (~30°C cooler).
It is so simple. There is or has been a nice balance on our planet of natural greenhouse gas emissions and sinks or absorbers if you like. Something has changed in the balance, that would be us. Since the industrial revolution we have and continue to released a huge amount of greenhouse gases and thus the balance has been broken.
Now you can agrue it all you like but this is the simple truth. From the most basic level of atmospheric physics if we put more greenhouse gases into the atmosphere then the atmosphere warms, if we reduce these gases it cools.
As I said, if you disprove this then you will probably win a Noble Prize and become pretty famous.
If you'd read NZIER/Infometrics report, you'd have seen that three paragraphs in, in large bold letters, the authors warn that this was a report about the impact of the change in carbon credit allocations. It is NOT a report on the cost of reducing emissions. It explicitly states that its conclusions should NOT be interpreted as the cost for reducing domestic emissions.
The entire story is pure spin and willful misinterpretation of the research. Please stop perpetuating it.
This discussion is really heating up. Perhaps we need to tax it, Nick?
Duncan Stuart seems to take the high ground with rational observations. No-one knows for sure what's going on - any scientist will be able to confirm that. But IF the planet heats up and that has significant consequences we will have missed the opportunity to act.
(I'll leave a note for my grand children explaining that we though it better to have first-world economy than long-term health) - or not.
If the plucked-from-the-air figure of 3k is correct, does this not represent the cost savings currently made by producers by not dealing with their own waste? If you are a farmer and you have to build a settling pond or other facility to recover carbon or other pollutants - that's a cost of doing business.
If you market won't accept (pay a premium for) the additional costs being added on then you don't have a market for your products. Someone without your costs will take it over.
New Zealand's primary produce has a profound effect on our economy - and it is based on, simply put, growing things faster and more cheaply than elsewhere. Added costs will blow our primary products out of the market, be it shipping costs, external subsidies or carbon tax.
We already gained competitive advantage by wholesale deforestation, and our agricultural sector has done little to reverse the problems of erosion and soil quality that resulted - essentially the slash and burn economics of the third world.
If the true costs are to be borne by the user, then that 3k is really what these guys have been stealing from every man woman and child to support their otherwise unprofitable enterprise.
Or do we want a major government subsidy - imagine Fonterra as Chrysler - that voters pay for anyway?
I say we should pay our own costs and spend goverment funds finding more profitable ways to exploit our renewable resources, rather than the dead-end track of propping up the status quo.
Maybe those funds are diverted from carbon tax?
I'm just saying...
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