If you think that the ongoing international negotiations about how to deal with climate change are a waste of time and won’t cost you anything, think again. While not all aspects of the issue are important, some have the potential to hit us hard in the pocket. Others have the potential to deliver economic gains. This article looks at the long term (to 2050) economic implications for New Zealand of three issues: how different greenhouse gases are converted into carbon dioxide equivalents, global participation in international agreements to reduce emissions, and the inclusion of agriculture in international agreements.
With the turmoil in financial markets in recent months it iseasy to forget about longer term issues such as global warming and the cost ofdoing something about it. The Emissions Trading Scheme (ETS) is supposedlymeant to reduce our consumption of carbon-intensive goods, such as energy,steel and concrete by raising the prices of those goods.
As oil prices once again reach levels last seen before the global financial crisis, we are reminded that the long term trend is upwards. Consequently we can expect to see a number of changes in transportation over the coming decades – more fuel efficient vehicles, greater use of public transport, a shift to hybrid or plug-in electric cars, and fuel switching from oil products to biofuels.
The idea of user-pays conservation is untenable to many people. However, access to New Zealand’s conservation estate already includes a level of user-pays. Tourism operators pay concessions to access Department of Conservation (DOC) land, which they recover by charging their customers. Trampers pay for the use of DOC huts and camp sites, although these facilities are often heavily subsidised from the public purse. But the majority of trampers, hunters, mountain bikers, and other eco-tourists or adventure seekers do not pay directly for the use of the conservation estate.
During the last few weeks many interest groups have criticised the Emissions Trading Scheme (ETS) for making us all poorer. There seems, however, to be considerable confusion between New Zealand’s commitment under the Kyoto Protocol and the ETS. It is the former that imposes an economic cost; the latter is a way of meeting that cost.
Once again we hear Federated Farmers bleating about the potential burden placed on them by an Emissions Trading Scheme (ETS), proclaiming that farmers are doing all they can to reduce greenhouse gas emissions. Hence any carbon charge on agriculture would be pointless. Rubbish.
As the main political parties seem to support the Emissions Trading Scheme (ETS) in some shape or form, one could be forgiven for thinking that the current Select Committee review of the ETS by the government is pointless.
The sharp contrast of bush fires and flooding in Australia has been blamed by some on climate change. While attributing any particular event to changes in the climate is difficult, an increasing frequency of such extreme events is expected under climate change. This applies to New Zealand as well.
In the next few months we can expect economic policies to start being released by political parties. Last week the Green Party kicked things off with a proposal to levy commercial use of water.
The Dominion Post of Friday 18 April had a front page article on congestion charging for the Wellington region at peak commuting times. Congestion charges have much theoretical merit, but the conditions under which they deliver are beneficial are not that easy to assess. As I read through the article I became progressively more concerned about the proposed scheme. Let’s start by looking at those aspects of the proposed scheme that really are complete rubbish.