The High Court has ordered the Government to reconsider its 2023-2027 emissions trading scheme settings, after agreeing the initial decision was not aligned with the emissions budget.
This is a win for Lawyers for Climate Action NZ who sought the judicial review after Cabinet chose to ignore the Climate Change Commissions advice and opted for looser ETS settings.
The Commission had recommended reducing the number of units available by auction and increasing the trigger price which releases extra units.
In December, Cabinet rejected this advice and made an additional 35 million units available over the next five years at lower-than-recommended prices. This was more than one year’s worth of emissions.
Having more units available has been a factor in the repeatedly failed auctions and falling unit price in the scheme, which is supposed to be the key pillar in NZ’s climate action plan.
The legislation governing these decisions requires the settings to be aligned with the annual emissions budgets in the Zero Carbon Act. It also does not give decision makers much scope to consider other factors, such as a higher carbon price lifting household costs.
Climate Change Minister James Shaw—who is responsible for carrying out the decision but encouraged Cabinet to follow the Commission’s advice—accepted the process was flawed and needed to be redone.
This avoided the need for a two-day hearing, and High Court Justice Matthew Palmer directed the minister to reconsider the unit limits and price control settings by 30 September.
“[Shaw admits] he did not have reasonable grounds to be satisfied that the combination of settings preferred by Cabinet (and adopted by the Minister) were in accordance with the 2050 target,” Palmer said in the judgment.
Cabinet was already due to make a decision on unit limits and prices for the 2026-2028 period, and the reconsideration of 2023-2027 settings will be done alongside that decision.
This means the next ETS auction, on September 6, will continue as planned with the settings approved last December.
Bronwyn Carruthers, president of Laywers for Climate Action, thanked Shaw for cooperating and avoiding the time and expense of a full hearing.
“It is vital that the ETS settings are made in accordance with our emissions budgets and not out of political concerns about the ETS price going too high,” she said in a statement.
The December decision had eroded confidence in the scheme and contributed to the secondary market price collapse and the first two auctions of 2023 failing.
Carruthers said every lever available must be pulled to mitigate humanitarian and ecological disaster of climate change and meet the obligations in the Climate Change Response Act.
“While it will be for the Government to reconsider the ETS settings, we will be watching closely to ensure that the settings are tightened in accordance with the science,” she said.
20 Comments
Tightened in accordance with science? Couldn't agree more.But the science is not just about emissions; the science is also about WHY we emit. And that comes back to burning untold historical sunlit acres - fossil fuels - in a one-off bonanza. Those acres cannot be displaced by above-ground acres; we're using those flat-out already. And some of us are using other people's acres.
We are entering a period where more and more contention for less and less available acreage, is going to lead conflict(s). It's what we've always done when locally overshot. This, however, is a one-off; the first and only possible time we've run overshoot globally. Worse, we're trying to justify continuance (of our over-shottedness) by playing the game in money - not in resources/physics. Choosing to fly blind, in other words.
And they're in trouble - because it can't do what is required. No amount of interest-raising can solve absolute scarcity or reducing EROEI or entropy on a never-bigger scale. No amount of monetary shenanigans can create that which doesn't exist. Ultimately, Lawyers for CC is an oxymoron; by the time we're down to a sustainable-rate flow of energy through the system - originated from real-time solar acres @ 1kw/sqm (daylight hours) @ 25% efficiency - minus transmission and usage losses - we haven't the surplus energy left over to pay lawyers (not if they expect to purchase parts of the planet with their remuneration, and there's not much that isn't a planetary part).
To be really successful then, they have to stop charging. One wonders how many of them have though?
Haven't heard from you in some time. Need to educate some on this site about the sun in NZ and what you can, or more to the point can't get out of it.
Tried NIWA's site for W/m^2 over a day for every day of the year. They have W/m^2 every h so you get a step wise function over the day. I would have preferred at least every minute or at the most five minute averaged intervals.
So how does this work with Forest Carbon credits not going to be able to be used to offset carbon emissions from industry? I didn't notice the carbon price shooting up in response to this news. I am thoroughly confused by the whole thing.
What will forestry credits be used for if they can't be used be used to offset emissions? Or will the carbon price rise as the quantity or proportion of forestry credits allowed for offset purposes is changed by political decree.
Yes, it's confusing. Most of the confusion is our inability to think physics (actually, chemistry too) instead of money.
We really have fudged the base-line; the first forests we plant, should be to replace the ones we've razed. That's an above-ground equation. It's why I planted a forest (1989-94) and DON'T claim credits; I'm replacing that which my generation consumed. Above-ground; my conscience; my social contribution.
What we're doing, is to take below-ground carbon, burning it for the energy, then not allocating energy to re-burying it. We've built an 'economy' which isn't paying its way thrice; once through drawdown of above-ground resources, and twice through drawdown of underground resources, and thrice via not mitigating the exhaust (CO2; pollutants).
But we can all keep on making money, right? And somehow if we have enough money, we can buy our way out of the crap?
Physics doesn't work like that - as Guggenheim found out in 1912....
Only some of the credits (NZUs) are tied to forests. Those are given to those that plant the forests to then be sold on the secondary market. The government allocated units are not directly linked to forests and are there to set an artificial cap and price on carbon emissions (this is the primary function of the scheme. Carbon offsetting is a secondary function).
So it's bull---t.
They will lower the cap over time - except agriculture refuses to wear a cap, and you cannot grow an economy under one so, sooner rather than later, the cap will be raised. Temporarily, of course, same as the debt we issue ourselves, with similar accompanying noises of intent.
This was a stupid attempt to apply neoliberal economics to physics, as if it was just another arena, another market. Sorry, but net energy is what does net work, and that is irrespective of proxy. Put a physical cap on by all means; lower it by all means - but understand the 'wealth' under it reduces commensurately. As for carbon - ration it, if you're serious. But, of course, we won't do that... That would be real...
Remember it is an election year ,the government actually subsidised fuel , and extended it. Allowing Carbon to be priced at a level that would reduce emissions was not going to happen, because it would be inflationary.
With the gloves off about a wealth /capital gains tax , we may get to hear what Shaw really thinks / wants to do with the carbon Credits. The Greens are not bluffing about going on the cross benches, many think they can achieve more in opposition. Its been that way since Clark snubbed Fitzsimons around 2000.That's akin to slapping mother Teresa in Green circles. then playing 2nd fiddle to Winston in 2017.
The carbon zero act is flawed. Some of the politicians who rode this brand wagon to the top are starting to see this and are trying to wiggle out.
Energy underpins very thing in our society. The war on the fossil fuel component and the inability of wind and solar to completely replace it drives shortages, inflation and geopolitical instability.
Ironically these well meaning lawyers are bringing the issue to a head. A rethink will be required if we want to maintain our affluent standard of living.
Germany is ahead on the curve on this, their solution is to embed the same high end carbon taxes they pay into trade agreements to level the competition to save their industry.
This might work if they can get the whole world on the wagon, proud little green NZ have jumped but there will be many notable exceptions that will continue to suck industry out of the green revolution block.
Be prepared for a train wreck.
'A rethink will be required if we want to maintain our affluent standard of living.'
You cannot maintain a way of life predicated on a finite resource you're half-way through. Sorry. Yes, we are headed for a train-wreck, but the Green New Deal types are opening the throttle while the neocons are shoveling the coal.
We seem to have the usual band talking about science and physics. Also modern science and physics as far as CC alarmists are concerned is based on consensus and models.
Try skeptical science started by a comedian and web developer. Has PhD in Cognitive Science. What science degrees will they think of next. He is/was a postdoctoral research fellow at the Climate Change Communication Research Hub at Monash University who advises Facebook. Also a Senior Research Fellow at the Melbourne Centre for Behaviour Change.
Sounds like a fancy name for one of those govt ministrys in George Orwells 1984. Ministry of Truth comes to mind.
"Consensus and models"? You forgot to mention hard data.
Consensus and models are still better than fake science, ignorance, economic ideologues, fundamentalist fairy worship, immunity to reality and politicians paid to shaft the planet by polluters etc, on the denial side of the ledger.
Meanwhile the planet keeps heating.
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