Editorial: Big changes are needed in the Government's climate change plan
Editorial: The Government's climate change policy has been a failure and will have to be rebuilt. There needs to be a fundamental change in the Emissions Trading Scheme, the subject this week of a damning report by the Gareth Morgan Foundation. But other changes are also needed.
The Morgan report confirmed what many already knew or suspected, that New Zealand binged on shonky carbon credits from the Ukraine and Russia. New Zealand used these credits, which are an alternative to reducing greenhouse gas emissions, as a way of meeting its targets under the Kyoto agreement. The report shows that, in fact, New Zealand was easily the largest per capita user of them in the world.
But the credits were fraudulent, mere "hot air" that mostly provided no reduction in emissions at all. The report shows how far this was the result of criminal deception; Russia is a Mafia state, and Ukraine is rotten with graft. The evidence mounted steadily from 2011, and in the last two years has become overwhelming.
Despite this, the New Zealand Government allowed polluters here to buy massive amounts of the credits. This helped cause a collapse in the price of carbon and encouraged a lot of deforestation, reducing the trees that would soak up greenhouse gases. With the price of carbon at only a few cents a tonne, reforestation made no economic sense.
Climate Change Minister Paula Bennett, in Paris this week to sign the new global agreement on climate change, argues that New Zealand made "the best decision based on the rules at the time." This is not very plausible. It stuck with the foreign credits long past the time when they had become unrespectable. But they helped to make it look as though the country was meeting its targets.
Bennett concedes, however, that the ETS was "not perfect", and is now being reviewed. In fact the ETS has been a fiasco. What's more, it continues to cast its dirty shadow.
The Government has banned the purchase of foreign credits, but it could still use the bad credits to meet its climate change targets up to 2020.
It must not do so. Instead, it needs to revamp the whole scheme, starting by ending the subsidies it gives to polluters such as the oil industry. The "one for two" scheme introduced in 2009 allows businesses to pay only half the cost of their greenhouse gas emissions.
It also needs to reverse its decision to keep agriculture, which produces half the country's emissions, out of the ETS. National argues that making farming pay for its pollution would be unfair because there is no workable way yet of reducing animal emissions and our export industry should not be penalised.
Farmers, however, are not exempt from the country's global environmental duties, and will also respond to economic signals - even if this is a pledge to bring agriculture into the scheme within, say, five years.
Much more will have to be done to meet our Paris targets. The Government can no longer bluff its way with the help of unreliable carbon credits.