Media release: Government should reject Climate Commission’s plans

Media release
9 June, 2021

Wellington (Wednesday, 9 June 2021): The New Zealand Initiative calls on the Government to reject the Climate Change Commission’s recommendations and instead rely on the Emissions Trading Scheme’s cap to achieve net zero emissions by 2050.

“The Climate Change Commission has based its plan on the idea that the ETS does not cap emissions,” says Dr Oliver Hartwich, Executive Director of the New Zealand Initiative. “But an ETS cap is the government’s policy and, since June of last year, it is the law.”

“Only this week, the Climate Change Minister said the government’s reforms of the ETS “put a sinking lid on emissions”,” says Dr Hartwich.

“The Commission’s plan cannot reduce emissions by a single gram since the ETS already caps emissions. You can only cap emissions once,” says Dr Hartwich.

“The Commission’s plan is based on a misunderstanding. The government should ignore the Commission’s advice.”

“The Commission says stockpiled carbon units mean the ETS cap is not fixed. But the government takes that stockpile into account when it decides how many units to auction each year. If the stockpile were not there, the government would auction more units.” The Commission's claim is wrong.[1]

The New Zealand Initiative supports the commitment to lower emissions and the emissions targets agreed by Parliament. 

“Because we support the net-zero goal, we oppose the Climate Change Commission’s plan,” says Matt Burgess, Senior Economist at the New Zealand Initiative.

“The first job of any emissions policy is to reduce emissions. Today’s plan from the Climate Change Commission does not do that.”

“The Climate Change Commission has now made two botched attempts to explain how its plan cuts emissions under an ETS,” says Mr Burgess.

“Households and businesses will unnecessarily pay many times too much to cut emissions because the Climate Change Commission refuses to reduce emissions at least cost,” says Mr Burgess.

“That puts our emissions targets at risk.”

“We can manage afforestation risks without abandoning a least cost approach,” says Mr Burgess.

“Rod Carr had one job, to deliver a credible path to our emissions targets. He has failed in that duty.”

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[1] The Ministry for the Environment states auction volumes are set taking into account stockpiled units (April 2021): https://environment.govt.nz/what-government-is-doing/key-initiatives/ets/nz-ets-market/setting-unit-limits-in-the-nz-ets/

ENDS


Matt Burgess is available for comment on 021 488 268 or matt.burgess@nzinitiative.org.nz

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