Wednesday 23rd October 2019
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The soon-to-be-formed Climate Change Commission should be given the power to influence carbon prices by setting volumes for emission credit auctions, exemption rates for trade exposed industries and the level of exposure to global carbon markets, Greenpeace executive director Russel Norman says.
Norman says the zero carbon legislation creating the commission is toothless, with a weak target for agricultural emissions, no requirement on the government to comply with the emissions budgets the commission sets and no ability to challenge government agencies if they don’t act.
But, speaking in a personal capacity, he said the commission could be given independent powers to take climate change action beyond the reach of short-term thinking of elected governments – in the same way the Reserve Bank was given an independent mandate to curb inflation in the 1990s.
“The inter-generational nature of the climate challenge and the global nature of the climate challenge means that we can’t expect our existing institutions to get us through,” Norman said in notes for the Bruce Jesson memorial lecture he gave at Auckland University.
‘We as a society consider low inflation and financial stability to be such important medium- to long-term goals that we have given an independent institution, the Reserve Bank, powers to help keep us on track to meet those goals.
“Yet when it comes to climate change we are proposing to set up an institution, the Climate Commission, which while independent has no independent powers to help us achieve our medium- to long-term goals of low emissions. Is inflation really a greater threat to us than climate change?”
The commission, to be chaired by economist Rod Carr, is modelled on the UK’s 11-year-old Committee on Climate Change, which also has only advisory powers.
Speaking earlier this month, Carr said that was appropriate. Given the scale of the challenge to be met, the country’s elected representatives had to be the ones held “responsible for the hardest of all choices.”
But he said they also needed to be well-advised, and that that advice needed to be transparent, evidence-based, and capable of being acted on with “courage” in order to make the tough decisions required.
Norman said the emissions trading scheme, also being restructured at the moment, provides multiple options for the commission to influence carbon prices and hence the pace of emissions reduction.
He said governments will always be under short-term pressure from polluters. Because of that, it should be the commission, not the government that sets the volumes of emission credits to be available for auction.
The commission should also have the power to amend the ratio of emission credits – New Zealand Units - that have to be surrendered – as the National government did when it halved the surrender obligation in 2010.
“If, for example, a company needed to surrender 1.1 NZUs to cover one unit of pollution then that would effectively be a direct 10 percent increase in the cost of pollution,” Norman said.
“The Climate Commission could vary the ratio depending on how we were going versus our carbon budgets.”
Norman said the planned wind-down of exemptions for agriculture and energy-intensive trade-exposed industries is not happening fast enough because of industry lobbying.
While the risk of carbon leakage is real, he said those arguments are being used by the government for political purposes. Those judgements should be left to the commission and made solely based on their climate impacts and not on industry lobbying.
“A Climate Commission with these powers would mean that the emission reduction targets, and carbon budgets, and the emission reduction plans would have an independent disciplinary power sitting behind them,” Norman said.
“If a government treated them as a ‘nice to have’ set of policies that could be dropped when they got hard, the Climate Commission would have the power to ensure that they are actually a ‘need to have’.”
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