British High Commission on European ETS

I blogged on Tuesday a comparison between the NZ ETS and the European ETS, concluding the NZ ETS is more “pure” as it includes all gases and all sectors.

The British High Commission has sent me this response, articulating the European view:

Same Game – Shared Targets

Many people note that New Zealand generates only a small proportion of global emissions and ask whether it matters if NZ acts or not. It very much does matter. If New Zealand – with its clean, green image – can’t make the move to low carbon, what hope for other countries? The important statistic in terms of global responsibility is greenhouse gas (GHG) emissions per person, that puts New Zealand near the top of the global league table.

Accurate figures vary depending on the source but the global average is around 7 tonnes of GHG per person per year. The UK and EU average is about 10 tonnes per year while New Zealand is around 19 tonnes GHG per person per year. To meet our global target of reducing emissions by 50%, everyone in the world needs to be at around 2 tonnes per capita by 2050. This shows the scale of the challenge facing New Zealand and all other countries.

The EU’s Game Plan

The ETS is only part of Europe’s response (more on this below). Commentators can only sensibly critique the European approach if the ETS is viewed in this context. More generally, no comment on European efforts should be made without acknowledging what Member States’ are already committed to. For example, by 2050 the UK is committed in law to having GHG emissions 80% less than those in 1990 (and so move from 10 to 2 tonnes per capita). In the nearer term the EU as a whole is committed to 20% (or possibly 30%) reductions by 2020.

It is misleading to make too much of a direct comparison between the EU and NZ ETSs. The crucial fact is that action to reduce an economy’s greenhouse gases requires a portfolio of policies. This is what we have in the EU. The key issue is to look at the best policy tool for reducing emissions in each sector. For example, the EU has looked at light vehicles (cars and vans) and recognised that they produce 12% of the EU’s emissions and so need to be tackled. So the EU passed legislation on the fuel efficiency of cars. It is now EU law that the fleet average for all cars registered in the EU is 130 grams per kilometre (g/km). This is being phased in over the next few years and there are hefty fines for companies that exceed the limit (up to 95 Euros per extra gramme of CO2 over the limit!). This is a sensible and effective approach to tackling transport emissions. So the fact that it is not in the EU ETS does not mean action is not being taken.

The same argument applies to housing, agriculture and waste. Each country also has a binding renewable energy target and their own range of policies (energy tax, feed-in tariffs etc) to ensure those targets are met. In addition the EU is contributing EUR 7.2 billion to climate finance over the next three years. Ultimately when comparing and contrasting the response to climate change of different economies the most important fact is the overall impact on GHG emissions. This shows that the EU is on the right track – 2009 emissions were around 17% below their 1990 level.

If forced to compare the NZ and EU ETS one key difference is that the EU ETS sets binding caps on emissions. So participants in the scheme will have their allocations gradually reduced to 21% below the 2005 level by 2020. There is currently no similar cap in the New Zealand scheme.

Climate change matters

Every country in the world will face stresses from climate change. Increased frequency and severity of floods, storms I and droughts will have a direct impact on New Zealand’s agriculture sector and infrastructure. The faster we all move to a low carbon economy – and there are a whole range of policies to get us there – the better.

Its great to get a response on what is a complicated and challenging issue.

Our per capita emissions are high, but that is partly because of the large number of cows we have, relative to humans. I have not calculated what it would excluding the cows, but suspect we would then be close to the UK average.

The UK response does impress upon me that doing nothing is not a viable option. Even Tony Abbott is not a proponent of doing nothing – he just proposes direct Government spending on climate change mitigation rather than an ETS.

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