The free-market think tank, the New Zealand Initiative, has this weekend produced a critique of the Climate Change Commission’s proposals to get to net-zero greenhouse gas emissions by 2050.
The Initiative says we can get there without any of the Commission’s radical proposals.
Instead, we should let the Emissions Trading Scheme unit price climb from its current $37 a unit up to around $50 and allow the market to make the decisions that the Commission is proposing be made by the Government.
The critique comes as the Commission has acknowledged that it has deliberately tried to manipulate media coverage of its proposals to ensure it got only supportive coverage.
And in a podcast produced by the libertarian Taxpayers’ Union on Friday, the Commission Chair, Rodd Carr, seemed to back away from some of the proposals in the 188-page draft document released last month, saying they were only one pathway towards net-zero emissions.
“Our path is not a central plan for the New Zealand economy,” Carr said.
Instead, it was a “demonstration pathway”.
“I can guarantee that from 2030, looking back, the path that we will follow will not be that one,” he said.
Carr also said the Commission had not advocated the lowest cost path to get emissions to net-zero; it was not required to do so in its legislation, he said.
Perhaps the two most contentious aspects of the Commission’s proposals relate to forestry and vehicles.
The Commission projects that exotic forests will have to increase annually on average by 25,000 hectares up to 2030 and after that by an indeterminate amount which would depend largely on what savings had been made by other sectors. The bigger the savings, the less forestry will be required.
It proposes that all forests over 50 hectares would have a management plan “to monitor the forest’s permanence and limit exposure to risks such as climate change impacts, governance failure, and community impacts.
But the New Zealand Initiative says all this is unnecessary. It argues that current afforestation rates under the Emissions Trading Scheme will be sufficient to get New Zealand to net zero.
(The last available year for planting figures shows that in 2019, 19,000 hectares of exotic forests were planted; the Commission argues that we need 25,000 hectares per year.)
The Initiative says that if we just continued with business as usual and allowed the ETS to rise to $50, that would achieve that target without the bureaucracy and controls implicit in the Commission’s proposal.
But would a rise like that in the ETS not impose costs on consumers?
Initiative economist, Matt Burgess, says that compared with how much the ETS has moved already, an increase to $50 is relatively small.
“We currently have an ETS price of about thirty-eight dollars,” he told POLITIK.
“That’s gone up from about nine dollars five years ago.
“So we’re most of the way there on the Commission’s modelling.
“Over the next twenty-nine years, you’ve got another 11 dollars to go.
“We’ve gone up 30 dollars over the last five years. “
The big controversial consumer area is the Commission’s proposal to ban the import of Internal Combustion Engine vehicles by 2035.
It implies this will need Government subsidies to happen.
It says the Government should “Introduce a package of measures to ensure enough EVs are entering Aotearoa and to reduce the upfront cost of purchasing light electric vehicles until such time as they are cost-competitive with the equivalent ICE (Internal Combustion Engine)vehicles.
The Commission’s proposals are accompanied by a series of statements relating to transport more generally and how towns and cities should be changed to provide a low emission transport environment.
“One of the main ways to decrease reliance on driving is by designing compact communities with the necessary infrastructure to enable easy access to alternative types of transport,” their report says.
The Initiative says this shows the Commission has pursued non-emissions goals at the expense of its statutory purpose to lower emissions.
“We do not understand the coherence of recommending both a low- or zero-emissions vehicle fleet and re-shaping cities to encourage walking, cycling, and public transport.,” it says
“ It is hard to see the emissions benefit of getting people out of zero-emissions vehicles.”
But Carr argues that the Commission’s legislative mandate is wider than simply and only reducing emissions.
This was clear in his response to a question in the Taxpayers’ Union podcast.
“Do you accept that New Zealand or the role of the commission should be to find the cheapest or least economically damaging pathway to the targets?” he was asked.
“No,” he replied.
“It’s very clear that the Commission is not tasked with finding the least-cost pathway.
“There are at least seven matters that the Act requires us to take into account in formulating emissions budgets and other matters that must be taken into account.
“Society is concerned about the cost, but is also concerned, and we are required to have regard to a range of other matters, such as the impact on generations to come, such as the distribution of impacts and yes, cost is one of the matters.
“But it is certainly not the case that the pathway that is required is the least-cost pathway.”
However, despite what Carr said, the Act’s seven matters the Commission must consider when setting carbon budgets do include “the likely economic effects.”
The Commission’s seeming unwillingness to consider alternatives to its proposals has also been evident in its media relations.
An Official Information Act release has revealed the reasoning behind the Commission’s refusal to release its original report to most Press Gallery journalists.
It was worried that coverage could be “negative, inaccurate or misinformed.”
“We have developed a process that means releasing an embargoed and redacted copy of our report to key media that we have a good relationship with,” the OIA document says.
“These reporters represent different publications and will be able to become a source of knowledge for their peers.
“Their reporting will also balance others.”
But as the New Zealand Initiative submission shows, criticism of the Commission’s report is likely to continue as controversies over the cost and practicality of its proposals are debated.