Morning roundup

A selection as I read through the morning papers.

• Twenty-three MPs claim an accommodation allowance to stay in their own Wellington properties.  Well, consider the alternatives, which the story doesn't.
  • You could pay all MPs much higher salaries and tell them to sort their own accommodation, which would mean higher effective pay for Wellington-area MPs who wouldn't need to pay for a second residence.
  • You could means-test access to accommodation support which would basically scale MP pay by prior wealth. It would also tilt things to discourage candidacy of middle-to-higher wealth MPs from outside of Wellington.
  • You could raze Premier House and put up halls of residence for MPs and the Prime Minister (and maybe have a reality show based there).
  • Or you could provide non-Wellington MPs who have a Wellington property with a strong incentive to sell off any Wellington properties by not providing the payment to MPs who don't live in Wellington but who have a house here.
  What do you think sucks least? Because I'm not sure there are other options.


• The Government is to run a Parliamentary inquiry into rural banking.

  The Federated Farmers’ campaign for an inquiry was led by farmer Richard McIntyre.
  “I have been inundated with phone calls and emails from farmers, and even some former bankers, wanting to tell their stories,” he said.
  “And there’s been some pretty harrowing stories.”
  The worst of those involved farmers losing farms that their families had owned for generations, he said.

  Parliament might consider whether difficulty in foreclosing on failing farms, because of this kind of response, provides a strong disincentive to lending on rural properties.


• I love that Xero is now putting out productivity data. The data is depressing. But great that Xero's doing it!


• My gawd people. We have a competitive electricity market. New supply can come in if demand increases - though we need to make consenting for it easier. Emissions from mining and from electricity are in the Emissions Trading Scheme. If you want fewer emissions, reduce the number of unbacked units the government will issue or allocated between now and 2050. But wanting to block a gold mine because it will use energy and might have CO2 emissions is nuts.

Expert advice

There are a few things you'd hope would be common knowledge about the Emissions Trading Scheme.

For example, the scheme caps net emissions. If emissions go down in one sector, another sector's emitters can buy the slightly-cheaper NZUs and use them. The only thing that reduces net emissions in the covered sector is government auctioning or allocating fewer units. 

And that the scheme wasn't designed by idiots. You can get credits for growing trees. But if you cut down the trees, or if the forest burns down, there are obligations: surrender the carbon credits or replant to sequester an equivalent amount of carbon. 

If the scheme didn't require surrendering credits if the forest burned down, it would be a pretty stupid design. 

MPI explains it in really simple language.

Natural disasters and other accidental events can damage forest land. Where this damage fells, burns, kills, uproots, or destroys the forest, the forest is treated as cleared in the ETS. This can result in a need to pay (surrender) New Zealand Units (NZUs or units) for the decrease in stored carbon.

From 2023, you can apply to pause carbon accounting if such an event damages your forest. This is called a "temporary adverse event suspension". If your application is approved, you won’t need to pay units for the decrease in stored carbon.

This pause will last until your forest:

• is re-established (replanted or regenerated), and
• achieves the same level of carbon storage as it had before the event.

So it's fun to read today's Carbon News:

The former chief science advisor for the Ministry of Transport says the current government isn’t even pretending to try to reduce carbon emissions from transport.

For the past six and a half years Simon Kingham, professor of Human Geography at Canterbury University’s School of Earth and Environment, was seconded two days a week to the Ministry of Transport as chief science advisor, to advise on the evidence base of government policy.

Kingham says the coalition government is taking a completely different approach to the former Labour-led government. “The previous government was working to reduce transport emissions. The current government is not even pretending to try.”

There is a long list of transport emissions reduction policies that the coalition government has binned. “They’ve cut back the Clean Car Discount, reduced the Road User Charges exemption for EVs, they’re winding back the Clean Car Standard, reducing funding for public transport, reducing incentives for walking and cycling, they’re building more roads which increases emissions, they’re encouraging density but also encouraging sprawl, which induces demand."

He continues:

The government seems to be focussing more on net emissions and offsetting, Kingham says. But that’s not a straightforward solution. “If the emissions reductions are not coming from transport or agriculture that puts a lot of pressure on tree planting.”

While the government issues carbon credits for tree planting, we don’t know if that sequestration is necessarily durable, Kingham says. “Do they get to keep the carbon credits if the forests burn down? As well as tree planting there’s talk of biofuels. That all adds up to a lot of land that’s going to be used and I don’t know if anyone has thought through the implications of that.”

While relying on the Emissions Trading Scheme might work to decarbonise other sectors, Kingham says it won’t work for transport. “The ETS is not going to deliver reductions in transport because the price it would have to go to is politically unpalatable. You’d have to add a dollar to the price of petrol and no-one is going to want to do that.”

One nice feature of the carbon price is that it tells us where emission reductions are most cost-effective. If one sector won't decarbonise much at a carbon price of less than $100, that tells us that there are lots of other ways of reducing net emissions for less than $100/tonne.

But it could be a fair critique to want transport planning to be making its best guesses as to what people will want as transport options when the carbon price rises to $100 or $150/tonne.

Anyway, it's always fun to gauge understanding of the ETS.

I'd always counted things like the clean car discount as pretending to try to reduce emissions.