COVER STORY : Emission Impossible? – How to put the heat on climate change

There’s little doubt things are heating up on the climate change front – and the evidence is not confined to mercury levels. Recent months have brought deluge of warnings from top international scientists that some of their climate models are being outpaced by reality.
In his first broadcast interview as president of the American Association for the Advancement of Science, John Holdren told BBC listeners that we are already experiencing “dangerous human disruption of the global climate” and more is to come.
Studies of Antarctic ice cores have just revealed that the rapid rise in greenhouse gases over the past century is unprecedented over an 800,000 year timespan. Closer to home, Australia’s rapid descent into drought conditions has taken scientists by surprise, according to National Water Commission spokesman Peter Cullen.
Meanwhile the self-described “former next president of the United States”, Al Gore is busy touring his global warming show, An Inconvenient Truth, around the world urging that we all take action now to change the otherwise catastrophic course climate change is taking. The message from him and from international speakers here for the recent Digital Earth Summit is that we have only short timeframe (maybe 30 years) to effect the changes needed to ensure survival of anything resembling our existing civilisation – there is no justification for delay.
And that’s just sampling of last month’s news – month that also saw climate change featured as detailed 16-page special report in The Economist and Arnold Schwarzenegger cement his status as an unlikely green warrior by supporting bill that requires California to cut its greenhouse gas emissions by 25 percent before 2020.
Now, clear evidence that the issue has landed on local business agendas. ShapeNZ online survey by the NZ Business Council for Sustainable Development (NZBCSD) has found that 45 percent of New Zealand’s business decision makers consider climate change to be an “urgent and immediate problem”. further 38 percent rate it as problem right now. Just eight percent see it as problem for the future and another seven percent reckon it’s not really problem at all.
NZ Business chief executive Phil O’Reilly isn’t surprised.
“There’s no question that this is an issue that has arrived, but for variety of reasons – and there is range of views in business about the urgent and immediate nature of climate change. That extends from those who see it as being urgent now right through to climate change sceptics.”
But combined push on the issue from central and local government as well as customers, investors and insurers means that even sceptics can’t afford to ignore the business implications of climate change.
“Where I think there is consensus in business,” says O’Reilly, “is seeing this as an issue that business needs to engage in – as much as anything because it is political issue. The Government is doing something about this, so business had better engage – there’s very practical bent about that.”
So just what is the Government doing?
Not quite enough – according to views expressed by ShapeNZ respondents. When asked how they rated the current Government’s management of climate change on one-to-five scale, most gave it only poor-to-mediocre score: 24 percent chose ‘one’, further 36 percent dealt it slightly kinder ‘two’, while 22 percent opted for ‘three’. (See survey details p31.)
Certainly its record to date has not been great. Since ratifying Kyoto and committing to carbon emission reduction in 2002, the Government has executed two perfect backward policy flips. proposed “fart tax” on livestock emissions which would have cost the farming industry an estimated $8.4 million raised huge stink before being quietly dissipated in New Zealand’s uniquely methane-laden airs. Then radical carbon tax for emitters set at $15 tonne and due to come into effect next year was also abandoned, late in 2005, in the face of business and consumer opposition.
Meanwhile our liability under Kyoto has been wafting skyward. Initially it was thought we could cheerfully flush our carbon down expanding forestry sinks and end up with tradable carbon credits. That was until economic growth contributed to higher-than-expected emissions while lack of both market or Kyoto-kind incentives to plant forests saw our ‘sink’ depleted by about 47 hectares worth of trees. The hoped-for credit turned to debit and by the end of 2005 New Zealand’s liability had totted up to carbon emission deficit of around 64 million units estimated to cost cool $606 million. That projection has since dropped back due mainly to higher energy prices but some reckon current estimates are probably on the low side and it all remains rather volatile.
What’s pretty certain is that, come 2012, we are going to have to go forth with big cheque book and buy carbon credits on global trading market. How best to offset this cost – not only to the country’s coffers but to our image as “clean” green country?

Where now?
After two false starts, key requirement for building future policy platforms on climate change has become “durability”. That’s the word David Parker, Minister of Energy and Climate Change Issues, chooses when asked about hoped-for outcomes from consultation process kicked off last month.
“I think people appreciate what we are trying to devise here is something durable, acceptable and that gives those affected by these measures the opportunity to participate in their design,” says Parker.
What he makes clear is that doing nothing is not an option.
“We know that under business-as-usual settings the amount of energy-related gas emissions we produce will increase by 30 percent over the next 25 years (about third of which relates to vehicle emissions),” says Parker. So business as usual “is not credible response” to the challenges that climate change presents.
The trick is in finding policy mechanisms that lead to emission reductions without stifling economic growth or compromising the competitiveness of New Zealand businesses. These will include mix of voluntary agreements, regulatory approaches and price-based measures on emissions.
The Government has 15 work programmes under way looking at issues that range from using our energy more efficiently and cleaning up the country’s car fleet to reducing agricultural emissions and dealing with deforestation. Some 24 cabinet papers relating to climate change are currently in the pipeline, says Parker.
“We’re also looking at what measures the Government should be taking to lead by example – incorporating fuel efficiency standards in our vehicle fleet, how we can have more energy-efficient buildings – all these things have to be cost efficient, of course.”
The initial aim is to go for the low-hanging fruit – to start from “where people are rather than where we want them to be” and to emphasise things that make sense irrespective of climate change, says Parker. An example is home insulation.
“Better insulated houses so we have warmer, healthier homes and lower heating bills is something that makes sense. Or where we have water quality problems from soil erosion it makes sense to plant trees. And I think most people agree that over time we need to increase the efficiency of our vehicle fleet.”
Then there are the potential financial levers – alternatives to the abandoned carbon tax. Although no decision has yet been made on what an emissions trading market might look like in New Zealand, it is undoubtedly on the cards. Parker has likened its potential operation to the fishing quota system in that there would be an overall cap on how much carbon can be emitted and credits can then be exchanged at price determined by the market.
Europe leads the way on this with its Emissions Trading Scheme (ETS) whereby countries get an emission allocation which is divvied out per industry and per company. Those who get an allocation bigger than they need (because they’ve invested in cleaner te

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