The NZ Institute needs to look a bit more closely before leaping into print.
The strangest thing about its exhortation that NZ should be a climate change ‘fast follower’ is that is precisely the position we’re in right now. The government has announced its emissions trading scheme. It will be fully up and running by 2013. Are we leading? Far from it. Europe already has one now. Australia (even under the great Kyoto denying Lil’ Jonny) will have one by 2011. Numerous US states are developing schemes. Japan has a peculiarly-Japanese voluntary scheme which will probably work. Norway has one… The list goes on. If we didn’t move now, we’d be left way behind the leading pack of developed countries.
Yes, the NZ iteration is the first all gases, all sectors because it will include agriculture and forestry, and in that respect it leads the world. But, given our unique emissions profile with the enormous contribution belching animals make to our greenhouse gas emissions, and the significant potential for mass deforestration, our scheme simply had to include those sectors to be credible, effective, and fair.
And it seems very strange to accept the importance to NZ of our clean, green, 100% pure brand, and then encourage the government to renege on its Kyoto obligations. Other than building a shiny new nuclear reactor across Lake Wakatipu from our tourism mecca, I can’t think of an action which would damage our brand more than what Skilling proposes.
Finally, Skilling laments the $700 million cost of Kyoto compliance. Yes, that’s quite a big number. But the economically literate chap that he is should know better than to place such a figure into a debate without any real context. By contrast, Infometrics (no friend of the government) recently completed an analysis of the costs to our economy of complying with our international climate obligations. It demonstrated that at current carbon prices, complying will have a neglible effect on the economy, perhaps somewhere between 0.0 and 0.3 percent change on a range of indicators. Our growth might slow marginally, so that the living standard we might reach in 2028, we might attain in 2029 or 2030. Even at much higher carbon prices, the impact was small. Not too scary really.