MfE looking at 'carbon dividend' cash payouts to recycle ETS revenues, but recycling climate funds to 'buy' domestic emissions reductions would super-charge our efforts, and avoid inflation
Man our Electricity Market is a total joke. When our generators are incentivised to keep the whole system at the brink of shortage just to keep those profits high. Meanwhile the regulator is toothless and pretty much does the bidding of the generators anyway.
But how much has deferring provisioning of renewable Wind & solar generation by the current New Zealand Generating companies led to the situation we are in this & coming winters?
Where is the leadership by the majority stock holder , i.e. the New Zealand Government?
Almost $1800 for an e-bike would be huge. It just seems like such an obvious policy, that is bizzare it hasn't been taken up. Councils are installing cycle-ways everywhere (with varying ambition of different councils) - it seems logical to support these councils climate ambitions by subsiding the largest financially barrier to more people using these cycleways.
I am on a decent income, but can't justify upgrading my clunker of a bike to an e-bike. Unfortunately, this means sometimes I make unnecessary trips in my car, as my old push bike just can't handle these Wellington hills.
Palmy's council is doing a pretty good job at getting cycle-ways and walk-ways embedded into our network infrastructure. I've always biked, but have noticed that the adage of 'build it and they will come' holds very true - there are more and more commuters using manual and e-bikes to get around in daily activities.
"The difference with motor vehicles ( and privately owned bikes and scooters ) is that almost all are privately owned by the driver or the driver’s employer. The driver assumes at least some risk and/or expense in the vehicle maintenance/operation so it’s in the drivers best interest to modify their driving/parking/storage behaviour.
That extends to point where if you owned an electric scooter, you wouldn’t leave it unsecured on the side of the road where it could stolen or vandalised.
Maybe money spent on subsidising scooter ride service would be better spent on subsidising private ownership of electric scooters."
Christchurch is crying out for an eBike discount scheme. I moved from Palmy to Chch last year a bought an eBike to commute on. Work, town, school and uni are all within 4km and therefore everything is legitimately less than 10mins away. The cycling infrastructure in Christchurch is some of the best in the country. Christchurch traffic is horrendous but my transit times are halved by biking, and it removes a car from the road. The weather is very conducive to biking and the eBike means you don’t sweat. It also forces you to only have one or two kids which is another win for the environment. All I see are positives.
I'm all for supporting investment in solar generation around homes, in addition to the renewables generated by the gentailers. Have previously made comments about long ROI's for solar for business who could make larger savings than many other users (but in reality they won't because the return does not stack up).
Transpower is warning demand will spike and blackouts are a risk this winter. The Glenbrook Steel Mill will make things even worse, as will the ongoing uptake of electric cars.
$23bn would deliver 1.15m solar units at $20k per home. That is many of the total NZ households.
Ideas:
1. Enable/Force power generators to pay more for power generated at homes or businesses, and underwrite schemes that finance solar paid for by future savings and power sold back to the grid.
2. If households have solar + batteries at home, they could release that power back to the grid at times of high demand, instead of when the sun is shining, reducing peak demand, if the returns are better then more households can do this. It could even be a tax deductible expense coded to emissions schemes of the CERF
3. Enable power generators to provide the assets for solar schemes on residential/business rooftops. The resident could give an easement for installation, but the power generator owns and maintains the asset. The resident gets paid in power savings, but the power retailer saves by reducing the cost of peak power demand by feeding power back to the grid at peak times.
Interesting proposal Kim. I have solar at home and keep an eye on the wholesale prices (mainly out of interest) as I export at the wholesale rate (being with Flick). At the moment it’s not particularly great from a financial perspective to invest in power storage given the capital investment required.
I personally think the simplest solution is just to have the government really ramp up supply to meet peak demand through renewables and then all that excess power being generated off-peak can be stored in EV batteries with some basic smart charging. Given our speed of EV adoption exceeding the government’s predictions it might be a viable solution.
I like this idea in principle, but in practice I wonder if we need to offer equivalent subsidies across a wide range of initiatives. For example, we'd love solar but, because of our roof configuration and trees, a number of installers have told us it would not be cost-effective... we still might do something, but there are going to be an increasing number of indiscriminate households (for example, high-density) that would be unable to access the large subsidies on offer, if we limit them to solar.
I'm all for the "let's create our own list" idea. Could we set up a shared document and have a crack at populating it? What basic info would we want to capture? e.g. Initiative name, brief description, how calculated emissions savings, how verified etc
Interesting to consider this concept for livestock farmers receiving payments for reducing emissions- identified as our most significant contributor. My recollection is that he waka eke now explored this.
You're on the right track in talking vouchers, Bernard. Now go next level and read up on Tradable Energy Quotas. Simply put, this the most effective and distributionally equitable instrument we could deploy to put an actual hard cap on fossil consumption while at the same time introducing a liquid currency into public circulation that displaces a quantum of the bank credit that the RBNZ so desperately wants to tighten the screws on.
The spending on the new steel furnace is a great deal! But the idea that we can just keep doing deals like that seems to be it's own sort of "magical thinking" 😃 The steel furnace represents 1% of our emissions, so we just have to find another 99 projects like that right!? I'm a bit skeptical that we could come up with a list like that. It reminds me of the govt. trying to come up with a list of "shovel ready" projects. Businesses are incentivised to get on the list and govt. are incentivised to believe them. One appeal of the ETS purist's approach is there's no magical thinking involved: it's going to be painful, there's no silver bullet coming to save us.
I'd love to be proven wrong of course! Even finding 10 or so projects like the steel furnace, that'd be a game changer!
I also really like the idea of the voucher system as a middle ground between cash payments and govt. directed spending. Not only does it prevent the money being spent on super-carbon-intensive things, it also prevents it being thrown in the bank and inflating asset prices.
Yes, if the government needs to buy carbon offsets then financing NZ based emissions reduction projects (not tree planting), certified by global accreditors, should be an obvious place to start. Not just local/central governments but also commercial enterprises who don’t have the luxury of being exempt from what remains of the ETS. That’s after they’ve taken all practicable measures to reduce their own emissions first!
I was mainly referring to emission "avoidance" projects where extra funding may be required to get them over the line (e.g. projects not unlike what NZ Steel just announced but probably on a smaller scale). Here's a good walkthrough of voluntary carbon markets and how such carbon projects would get developed & verified so the credits can be issued & sold:
Had we had the idea of an ETS dividend from the start, as was proposed by Eric Crampton of the NZ Initiative from the start (he's Canadian it seems) the $4.5bn might have been enough for $2000 for each household. His point was that wealthier families create more carbon than less well off families so the dividend at equal amounts is 'progressive'. For me, I'd do it more strictly and cut out households in the top 25% of income (at least), allowing more for the rest. Net zero will cost us all money, it will make us relatively poorer, there's no escaping that, and I'd like to see the market used to allocate the pain, with a redistributive mechanism like a dividend from the ETS cost to compensate those least able to cope financially.
Provide funds to Community Housing Providers to build low carbon, climate resilient community homes near transit hubs.
Man our Electricity Market is a total joke. When our generators are incentivised to keep the whole system at the brink of shortage just to keep those profits high. Meanwhile the regulator is toothless and pretty much does the bidding of the generators anyway.
Nowhere near as bad as the 2000–01 California electricity crisis
https://en.wikipedia.org/wiki/2000%E2%80%9301_California_electricity_crisis
But how much has deferring provisioning of renewable Wind & solar generation by the current New Zealand Generating companies led to the situation we are in this & coming winters?
Where is the leadership by the majority stock holder , i.e. the New Zealand Government?
We need to renationalise the whole power industry & return it to the non profit model which operated before 1990.
Almost $1800 for an e-bike would be huge. It just seems like such an obvious policy, that is bizzare it hasn't been taken up. Councils are installing cycle-ways everywhere (with varying ambition of different councils) - it seems logical to support these councils climate ambitions by subsiding the largest financially barrier to more people using these cycleways.
I am on a decent income, but can't justify upgrading my clunker of a bike to an e-bike. Unfortunately, this means sometimes I make unnecessary trips in my car, as my old push bike just can't handle these Wellington hills.
Palmy's council is doing a pretty good job at getting cycle-ways and walk-ways embedded into our network infrastructure. I've always biked, but have noticed that the adage of 'build it and they will come' holds very true - there are more and more commuters using manual and e-bikes to get around in daily activities.
"Maybe money spent on subsidising scooter ride service would be better spent on subsidising private ownership of electric scooters" & Electric Bikes.
Auckland Council ( Pre-Wayne Brown at least ) have provided funding to Bike & Scooter share schemes...
https://at.govt.nz/cycling-walking/research-monitoring/cycle-share/
However IMHO the e-bike / e-scooter sharing model is not really sustainable
https://www.greaterauckland.org.nz/2019/04/29/scoot-math/#comment-303148
"The difference with motor vehicles ( and privately owned bikes and scooters ) is that almost all are privately owned by the driver or the driver’s employer. The driver assumes at least some risk and/or expense in the vehicle maintenance/operation so it’s in the drivers best interest to modify their driving/parking/storage behaviour.
That extends to point where if you owned an electric scooter, you wouldn’t leave it unsecured on the side of the road where it could stolen or vandalised.
Maybe money spent on subsidising scooter ride service would be better spent on subsidising private ownership of electric scooters."
Christchurch is crying out for an eBike discount scheme. I moved from Palmy to Chch last year a bought an eBike to commute on. Work, town, school and uni are all within 4km and therefore everything is legitimately less than 10mins away. The cycling infrastructure in Christchurch is some of the best in the country. Christchurch traffic is horrendous but my transit times are halved by biking, and it removes a car from the road. The weather is very conducive to biking and the eBike means you don’t sweat. It also forces you to only have one or two kids which is another win for the environment. All I see are positives.
Manatū Mō Te Taiao (Ministry for the Environment)
I'm all for supporting investment in solar generation around homes, in addition to the renewables generated by the gentailers. Have previously made comments about long ROI's for solar for business who could make larger savings than many other users (but in reality they won't because the return does not stack up).
Transpower is warning demand will spike and blackouts are a risk this winter. The Glenbrook Steel Mill will make things even worse, as will the ongoing uptake of electric cars.
$23bn would deliver 1.15m solar units at $20k per home. That is many of the total NZ households.
Ideas:
1. Enable/Force power generators to pay more for power generated at homes or businesses, and underwrite schemes that finance solar paid for by future savings and power sold back to the grid.
2. If households have solar + batteries at home, they could release that power back to the grid at times of high demand, instead of when the sun is shining, reducing peak demand, if the returns are better then more households can do this. It could even be a tax deductible expense coded to emissions schemes of the CERF
3. Enable power generators to provide the assets for solar schemes on residential/business rooftops. The resident could give an easement for installation, but the power generator owns and maintains the asset. The resident gets paid in power savings, but the power retailer saves by reducing the cost of peak power demand by feeding power back to the grid at peak times.
Interesting proposal Kim. I have solar at home and keep an eye on the wholesale prices (mainly out of interest) as I export at the wholesale rate (being with Flick). At the moment it’s not particularly great from a financial perspective to invest in power storage given the capital investment required.
I personally think the simplest solution is just to have the government really ramp up supply to meet peak demand through renewables and then all that excess power being generated off-peak can be stored in EV batteries with some basic smart charging. Given our speed of EV adoption exceeding the government’s predictions it might be a viable solution.
I like this idea in principle, but in practice I wonder if we need to offer equivalent subsidies across a wide range of initiatives. For example, we'd love solar but, because of our roof configuration and trees, a number of installers have told us it would not be cost-effective... we still might do something, but there are going to be an increasing number of indiscriminate households (for example, high-density) that would be unable to access the large subsidies on offer, if we limit them to solar.
I'm all for the "let's create our own list" idea. Could we set up a shared document and have a crack at populating it? What basic info would we want to capture? e.g. Initiative name, brief description, how calculated emissions savings, how verified etc
Interesting to consider this concept for livestock farmers receiving payments for reducing emissions- identified as our most significant contributor. My recollection is that he waka eke now explored this.
Really good recent podcast about the philosophy of net zero and our policy responses. https://www.volts.wtf/p/the-trouble-with-net-zero
"It was a huge trick to get us to focus on what happens after the point of combustion rather than the extraction itself."
Toha have/are developing a market to track and verify the impact of climate investments https://www.toha.network/
There have been programs before, like the subsidised CFLs some years back, that delivered savings and market changes.
Great idea about solar panels subsidies. I have all day Sun but not keen on 30k install
What a great post! Are any of our political parties advocating such a "virtuous cycle" use of ETS vouchers?
You're on the right track in talking vouchers, Bernard. Now go next level and read up on Tradable Energy Quotas. Simply put, this the most effective and distributionally equitable instrument we could deploy to put an actual hard cap on fossil consumption while at the same time introducing a liquid currency into public circulation that displaces a quantum of the bank credit that the RBNZ so desperately wants to tighten the screws on.
Haha, dangerously close to an actually good deployment for a crypto currency? ;-)
The spending on the new steel furnace is a great deal! But the idea that we can just keep doing deals like that seems to be it's own sort of "magical thinking" 😃 The steel furnace represents 1% of our emissions, so we just have to find another 99 projects like that right!? I'm a bit skeptical that we could come up with a list like that. It reminds me of the govt. trying to come up with a list of "shovel ready" projects. Businesses are incentivised to get on the list and govt. are incentivised to believe them. One appeal of the ETS purist's approach is there's no magical thinking involved: it's going to be painful, there's no silver bullet coming to save us.
I'd love to be proven wrong of course! Even finding 10 or so projects like the steel furnace, that'd be a game changer!
I also really like the idea of the voucher system as a middle ground between cash payments and govt. directed spending. Not only does it prevent the money being spent on super-carbon-intensive things, it also prevents it being thrown in the bank and inflating asset prices.
Like it Bernard.
Want to see the list! No more "shonky" emissions reductions to the Russian Mafia please. Let's do it ourselves.
Patrick Medlicott
Yes, if the government needs to buy carbon offsets then financing NZ based emissions reduction projects (not tree planting), certified by global accreditors, should be an obvious place to start. Not just local/central governments but also commercial enterprises who don’t have the luxury of being exempt from what remains of the ETS. That’s after they’ve taken all practicable measures to reduce their own emissions first!
I was mainly referring to emission "avoidance" projects where extra funding may be required to get them over the line (e.g. projects not unlike what NZ Steel just announced but probably on a smaller scale). Here's a good walkthrough of voluntary carbon markets and how such carbon projects would get developed & verified so the credits can be issued & sold:
https://coremarkets.co/insights/understanding-compliance-and-voluntary-carbon-markets-a-guide-for-sustainability-leaders
Had we had the idea of an ETS dividend from the start, as was proposed by Eric Crampton of the NZ Initiative from the start (he's Canadian it seems) the $4.5bn might have been enough for $2000 for each household. His point was that wealthier families create more carbon than less well off families so the dividend at equal amounts is 'progressive'. For me, I'd do it more strictly and cut out households in the top 25% of income (at least), allowing more for the rest. Net zero will cost us all money, it will make us relatively poorer, there's no escaping that, and I'd like to see the market used to allocate the pain, with a redistributive mechanism like a dividend from the ETS cost to compensate those least able to cope financially.