There’s a better recipe

More centralised control, more regulation, more bureaucracy; higher costs, fewer farm animals; less export income, more poverty . . .

That’s the Climate Commission’s recipe.

The New Zealand Initiative has a better one:

The New Zealand Initiative calls on the Government to reject the Climate Change Commission’s recommendations and instead rely on the Emissions Trading Scheme’s cap to achieve net zero emissions by 2050.

“The Climate Change Commission has based its plan on the idea that the ETS does not cap emissions,” says Dr Oliver Hartwich, Executive Director of the New Zealand Initiative. “But an ETS cap is the government’s policy and, since June of last year, it is the law.”

“Only this week, the Climate Change Minister said the government’s reforms of the ETS “put a sinking lid on emissions”,” says Dr Hartwich.

“The Commission’s plan cannot reduce emissions by a single gram since the ETS already caps emissions. You can only cap emissions once,” says Dr Hartwich.

“The Commission’s plan is based on a misunderstanding. The government should ignore the Commission’s advice.”

“The Commission says stockpiled carbon units mean the ETS cap is not fixed. But the government takes that stockpile into account when it decides how many units to auction each year. If the stockpile were not there, the government would auction more units.” The Commission’s claim is wrong.[1]

The New Zealand Initiative supports the commitment to lower emissions and the emissions targets agreed by Parliament.

“Because we support the net-zero goal, we oppose the Climate Change Commission’s plan,” says Matt Burgess, Senior Economist at the New Zealand Initiative.

“The first job of any emissions policy is to reduce emissions. Today’s plan from the Climate Change Commission does not do that.”

“The Climate Change Commission has now made two botched attempts to explain how its plan cuts emissions under an ETS,” says Mr Burgess.

“Households and businesses will unnecessarily pay many times too much to cut emissions because the Climate Change Commission refuses to reduce emissions at least cost,” says Mr Burgess.

“That puts our emissions targets at risk.”

“We can manage afforestation risks without abandoning a least cost approach,” says Mr Burgess.

“Rod Carr had one job, to deliver a credible path to our emissions targets. He has failed in that duty.”

[1] The Ministry for the Environment states auction volumes are set taking into account stockpiled units (April 2021): https://environment.govt.nz/what-government-is-doing/key-initiatives/ets/nz-ets-market/setting-unit-limits-in-the-nz-ets/

The Taxpayers’ Union  says the commission has doubled down on the most egregious and costly aspects of the plan,:

“The Climate Change Commission has thrown a bone to a few sectors while doubling down on the most egregious and costly aspects of the plan,” says New Zealand Taxpayers’ Union spokesman Jordan Williams in response to the release of the Commission’s final report.

The following quotes are attributable to Mr Williams:

High-cost approach: “The Commission doubles down on its decision to avoid a ‘least cost’ approach. In other words, the plan knowingly does far more damage to our economic welfare than is necessary to achieve our emissions targets.”

Obsession with ‘gross’, not ‘net’ emissions: “The Commission barely bothers to justify why it’s focused on slashing ‘gross’ emissions, and not ‘net’ emissions. Slashing gross emissions means radical and costly regulation of local sectors. Meanwhile, affordable ways to reduce net emissions, such as offshore tree-planting, are ruled out.”

Ignores the ETS: “The Commission’s own fine print once again concedes that we are already on track to meet our net zero emissions target using the Emissions Trading Scheme. This should be in the headline of every news story about the plan. If the Commissioners were worried the accuracy of the forecasts, they could have laid out a plan to strengthen the ETS. But instead they’ve used their obsession with ‘gross’ emissions to ignore these forecasts and push new regulations that won’t even reduce emissions due to the way the ETS works.”

If the Commission admits we are on track to meet the zero emissions target with the ETS why does it want to impose such high economic and social costs on us for no environmental gain?

Politicians empowered: “The Commission’s report has been welcomed by the Prime Minister and James Shaw, and it’s not hard to see why. This report urges politicians to be ‘as ambitious as possible in each sector’, and James Shaw is saying that all Ministers will have to think of themselves as Climate Change Ministers. This opens the floodgates for radical interventions at every level of our economy and lifestyles.”

Politicisation by the Commission: “The Commission was set up to ‘take the politics out of climate change mitigation’ but at every turn Rod Carr and his officials have done the opposite. He’s taken it on himself to outline what he has acknowledged are the most radical reforms of the New Zealand economy since the ’80s. Such radical plans deserve real scrutiny, but he’s even politicised that. In today’s lock-up briefings, media and independent analysts were given less than an hour to absorb a 400-page document, and while favoured media were invited, opponents of his draft plan were excluded. That’s outrageous.”

The reforms of the 80s were tough but made the country stronger.

The Commission is prescribing far stronger medicine and it will do little or nothing to treat the environment while imposing unnecessary economic and social pain.