Inevitable Delay For Stationary Energy ETS Start – Smith
July 1st, 2009
• Jan 2010 timetable “never achievable.”
• Cross-party talks to ease ETS timetable.
• 2020 target consultation starts.
Climate Change Minister Nick Smith’s acknowledgement the Emissions Trading Scheme cannot be implemented by January 1 next year for stationary energy and industrial processes is intended to give certainty to those sectors. But the climb-down demonstrates just how difficult it will be to achieve progress on meaningful global carbon emissions reductions as the world approaches the crunch meeting in Copenhagen this December to replace the Kyoto scheme.
Smith made his admission in Parliamentary Select Committee hearings, saying he had been advised late last year “timetables in the ETS (for stationary energy and industrial processes) were always unachievable, even without a Select Committee review. There is going to have to be some modification.” Further detail won’t emerge until the ETS is reported back to Parliament by the Select Committee reviewing the scheme enacted by the last Labour Govt, because Parliamentary rules prevent Ministers from pre-empting Select Committee reviews of pending legislation.
Smith also signalled, unlike forestry, which has been granted delayed reporting dates but will continue to be counted in the scheme from January 1, 2008, the absence of allocation formulas for stationary energy and industrial processes make their inclusion from Jan 1, 2010 untenable. “You could not start up the ETS without the details of the allocation plans being known. Many of them (stationary energy and industrial) are processes of production. Without knowing the net impact on the prices of the goods or services they provide, it’s very unfair to impose that requirement on them.” The Minister remains guarded on the recommendation of the joint NZIER-Infometrics study for the emissions trading review which recommended the initial exclusion of agriculture from an ETS because of the cost and complexity of measuring agricultural emissions. Agriculture is already last into the ETS and will definitely be included “at some point.”
The Govt says including transport fuels in an ETS is more straightforward, and could technically be included in the scheme prior to the current target date of January 2011. However, the Govt will make no decisions before the ETS Select Committee reports back to Parliament. Smith also confirmed progress on establishing a target for emissions reductions through to 2020, which is required for the Copenhagen climate summit this summer.
NZ will take its position to the next round of pre-Copenhagen talks, in Bonn in August. Meanwhile, major energy users are questioning the conclusions of the joint NZIER-Infometrics report to the Select Committee on the ETS, saying its reliance on “coarse” modeling tools is not robust enough to inform policy-making.
Copyright © Media Information Ltd
NZ Energy & Environment Business Week
Amalgamated Dairies