New Zealand's Climate Change Policies: Past and Future Malcolm Harbrow

What am I doing here? Studying Climate Change Policy for an M. Phil Analyse the challenges faced by NZ in meeting its Kyoto targets Examine NZ’s climate change policies, with a particular focus on recent events Assess effectiveness of new polices in meeting Kyoto goals, and compare them with discarded ones.

New Zealand's climate change problem Kyoto obliges us to cut emissions to 1990 levels over CP1 ( ) But emissions keep rising:

Sources of emissions: “Energy” can be further subdivided into Transport (19.2%) and Electricity (9.6%) So its clear what the problem is…

1994 Policy Goal: stabilise net CO 2 emissions at 1990 levels by % of meeting target would be met by emissions reductions from: –Voluntary agreements –Electricity reform –Energy efficiency 80% would be met from forestry If targets were not met by mid 1997, a carbon tax would be imposed.

1996 Working Group on CO2 Policy Looked at long-term options Conclusions: Regulations don’t work: "specific subsidies or regulatory interventions will not, in general, provide a least-cost or durable response to reducing Co2 emissions“ Instead, backed an economic instrument

1999 Domestic Policy Options Statement Looked at options for implementing emissions trading regime “Following a business-as-usual 'emissions path' prior to 2008 is not a least cost approach to meeting our commitments.” Proposed three possible interim measures to bridge the gap until ETS introduced: –forward market –pilot trading and carbon charge –carbon charge

2002 package Goal: to set emissions on a permanent downward path by 2012 Carbon tax capped at $25/T Exemption of agricultural emissions Negotiated Greenhouse Agreements for "at-risk" industries Projects mechanism Government maintaining liability for forests, up to a “deforestation cap” of 10%.

Constant features “Least cost” solution Reliance on forestry Hostility to regulatory measures Preference for economic instruments Reluctance to actually implement

2005: The Review May 2005: projected balance of units changed from 55 MTCO 2 e surplus to 34.6 MTCO 2 e deficit (now 41.2 MTCO 2 e deficit) June 2005: Review of climate change policies initiated September 2005: an election December 2005: Carbon tax scrapped

2006 No goal, no policy Hints of some policies eventually: –A renewables target? –A carbon tax only on large emitters? –Energy efficiency standards for cars? –Biofuels? –Carbon credit devolution?

Comparing policies Difficult, as they are still being announced Review and political reality has effectively ended any hope of an economic instrument This has helped overcome reluctance to regulate New policies almost certain to be less effective than old ones.