Dawn Chorus: Take Pine out of ETS?
Govt considers ETS change options, including taking carbon sequestration credits out of ETS and having a separate market; Hipkins wobbles on surgery equity; Market study on banks imminent; Botched BCR
TL;DR: Finally, under pressure from an unusual alliance of the Climate Commission, farmers and environmentalists, the Government is revisiting the inclusion of carbon sinking credits for permanent pine forests in the Emissions Trading Scheme, but it has given itself enough time to avoid a tough decision until after the election.
Climate Minister James Shaw yesterday announced the Ministry for the Environment was conducting a review and had proposed four options to soften the current use of permanent pine forest credits from helping emitters to avoid reducing their gross emissions.
The options include pulling pine out of the ETS to establish a separate lower price than the existing scheme, with the creation of an ‘exchange rate’ that incentivises gross emissions reduction.
Meanwhile, the planet is not waiting for the politicians to catch up and keeps cooking at an accelerating and alarming rate. There are fresh warnings overnight of 50 degree-plus record-high temperatures in China and the Middle East, along with 40 degree-plus temperatures in Britain because of record-high sea temperatures in the Atlantic. Sea ice levels are also hitting record lows around Antarctica.
News elsewhere in our political economy on housing, climate and poverty
Interest.co.nz’s Erik Frykberg is reporting this morning the Government is likely to announce a market study into the banking industry today. I’ve called for this in the past and written on it here.
Stuff’s Erin Gourley reports Wellington City Council’s plan to lower speed limits to 30 kph on most streets has been put on hold because a Councillor found a spreadsheet error that turned a benefit to cost ratio from 7.7 to minus 1.8. Isn’t this a good thing to do anyway for health and climate reasons?
The Post-$$$’s Rachel Thomas reports Pharmac won’t fund a $60 flu jab for the elderly, even though it’s more effective than existing ones and will help stop hospital A&Es and GPS being overwhelmed this winter. But the important thing fiscally is that our net debt remains on track to fall to near to 10% of GDP in coming years, which keeps interest rates low and land prices high. Job done.1
The NZ Herald reports PM Chris Hipkins has asked Health Minister Ayesha Verrall to review the equity policy being used in Auckland to reduce surgery waiting times for Maori. It’s another case of NewstalkZB’s news judgement and framing setting the political agenda, although the NZ Herald’s reporters Rachel Maher and Nick Jones did a good job of explaining the equity reasons here and here-$$$-!!! I suspect the editors and the reporters at the NZ Herald are not aligned…
The Post-$$$’s Nicholas Boyack reports this morning the Hutt Valley’s Community foodbank is desperate for funds because it is rapidly running out of money and food. But the low debt to GDP ratio is excellent and the long-run costs of the poverty exposed by a tripling of food bank demand since Covid aren’t included by Treasury in the Crown’s long-term liabilities, so no worries…
The NZ Herald-$$$’s Anne Gibson reports developers are up in arms about the rejection by the Auckland City Council of a plan for a greenfields development at Riverhead that would have allowed the building of 1,800 homes. This is how housing and infrastructure policy works perfectly to restrain housing supply to ramp up land values for homeowners who don’t want to pay extra rates for the infrastructure needed for all the new migrant workers looking after their elderly relatives and driving their food to them via Uber-Eats.
RNZ’s Tim Brown reported from Queenstown yesterday that dozens of migrant workers are being exploited by Queenstown employers who are not meeting the minimum conditions required by their visas. Our churn and burn economy is in full burn mode.
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Quote of the day
Sometimes the playing field needs levelling first
“This is an attempt to try and achieve more equity, rather than give any advantages. At a basic fundamental level, when a Māori patient hits that surgical wait list they’re already far behind their non-Māori counterparts. This is a small step to address that inequity.” New Zealand Society of Anaesthetists’ president Dr Morgan Edwards quoted in Stuff about how many Māori patients were likely to have experienced health inequalities before even reaching surgical wait lists.
Charts of the day
Grocery price inflation just went negative in the US. Here? Not so much.
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Comment of the day
Cartoon of the day
A fun thing
Tauhou being friendly, via the amazing SeanDG
Ka kite ano
Bernard
Please be advised I am being sarcastic. Without much joy at all.
Hi Bernard,
I have been enjoying your work for a while now. Often however, I can't help but feel that the rate of climate change is rather making the discussions meaningless. Your policy recommendations as good as they are, only make sense if IPCC modelling is accurate. The problem as I see it, is that the IPCC is essentially a conservative voice based on the consensus of science and policy makers.
It's models only take into account fast feedbacks (such as cloud cover - which has it's own problems) and ignores slow feedbacks. It is looking like these are not anywhere as slow as once thought, with arctic melt, albedo changes, permafrost breakdown, rainforest emissions (I could go on) happening at rates that make the likely 2100 temperatures will eclipse RPC 8.5.
Putting the models to one side, and looking at Paleoclimate data, - see: James Hansen et al. in his latest paper (https://arxiv.org/abs/2212.04474) we've already blown way past 1.5°C. Based on emissions to date, we are heading for an equilibrium temperature of +7 to +10°C. And at timescales that will certainly impact our children and grandchildren.
I can't help but feel that our best option now is to think about the radical deep adaption that we will need to save at least some of what this human civilisation has created.
I don't know what is behind successive NZ govts strict adherence to debt containment, albeit dropped for a time during Covid. But readers should understand that low debt does not equal low interest rates (NZ currently!) You can also have high debt and high rates (Brazil - be careful what you wish for?) zero net debt and relatively high rates (Norway, because the central bank wants it that way) extremely high debt and low rates (Japan). The two are simply not coupled the way it might sound.