ETS:Carbon Trading-some questions
Much has been written about the Emissions Trading Scheme in recent days.
Adam thought it might be useful to note the following item from the Financial Times, which deals with Carbon Trading:
Carbon trading was worth about $64bn last year, after a sharp rise in numbers of transactions in the fledgling market for greenhouse gases, the World Bank reckons.
In its annual review of the emissions trading market, it said the value of trades more than doubled from 2006 to 2007. The European Union’s emissions trading scheme (EU ETS) made up the bulk of the market, as it has done since its inception in January 2005.
Transactions under the EU ETS nearly doubled, as did the value of carbon permits sold by the scheme.
The article goes on to discuss various factors affecting the market and concludes:-
A further complication is that many investors in developing country projects are cautious about the prospects for the market to be able to continue after 2012. The current provisions of the Kyoto protocol expire in that year. Governments are engaged in talks scheduled to finish late next year. These are intended to forge a successor to the treaty.
“Lack of clarity [about the situation as from] post-2012 is countering growth of markets such as the EU ETS,” said Andrew Ertel, chief executive of Evolution Markets, which contributed to the report. “The market is truly at a crossroads as participants appreciate the complexity and risks of carbon trading.”
The World Bank Review is a lengthy read, at 78 pages, but on a scan through Adam noted the following:
- The EU do not include at present agriculture or transport
- Australia is seeking to develop a comprehensive scheme aligned to other Pacific economies
If this is the case, then the obvious questions are:-
- Why is NZ going it alone on agriculture?
- Why are we potentially hobbling ourselves with regard to future international negotiations? Have we not learned from the past in these matters? Other nations, for example the French and the Australians have mastered the art of achieving maximum benefit through tough negotiating postures.
- By including agriculture are we not setting ourselves up for problems in future negotiations with the EU on market access?
- Why are we not seeking to work closely with the Rudd government in Australia?
- Working with Australia and having an ETS which is essentially common would appear to be sensible as it would facilitate Australasian carbon trading and under CER would appear to be logical; plus it may reduce the scope for carbon leakage from NZ to Aussie, so why are we not doing this?
- Have we considered the problems which might emerge from having an ETS which is out of step with Australia and the EU?
- Has the government been on an eco ego trip?
- Can sanity be restored to both Labour and National before it is too late?
- [Update: Adam forgot to note why are we not considering the implications of what might replace Kyoto, post 2012?]
Adam has linked here to an FT resource page on Climate Change
Tags: Australia, CER, Emissions Trading Scheme, ETS, EU, Financial Times, New Zealand, NZ Politics, Rudd Administration, World Bank
