Does anyone actually want our carbon credits?
In the wake of another failed auction, the ETS is getting a shake-up – and it may mean a future with fewer pine trees.
Mōrena and welcome to The Bulletin for Friday, June 16, by Catherine McGregor. Presented in partnership with Z Energy.
In today’s edition: Stuart Nash report lands this morning; claims airlines are over-charging Immigration for deportations; and why planting pine isn’t the answer to our long-term climate goals. But first, what does the latest “reserve not met” auction mean for the emissions trading scheme?
(Image: Tina Tiller)
Another auction, another ‘no sale’
Maybe because the result was so widely expected, Wednesday’s failed ETS auction seemed to pass with barely a raised eyebrow. Or perhaps it was because the auctions, a key part of our carbon reduction efforts, can be pretty difficult to understand. Here’s the tldr from the environment ministry: Under the emissions trading scheme, businesses must “buy and surrender to the government” one NZU (emission unit) for every one tonne of carbon dioxide-equivalent emissions they produce. These then get sold to other emitters through an auction process, with the successful purchasers gaining the right to create one tonne of carbon dioxide for every NZU they own. Olivia Wannan of Stuff’s Forever Project newsletter has a more in-depth explanation of how the bidding process works here.
So what’s going on?
This is the second failed ETS auction of the four scheduled for 2023. Unsold NZUs are added to the subsequent auction; if they aren’t sold at the end of the year they’re cancelled entirely, which would be “a win for the climate as fewer credits available means less damaging gases emitted,” explains RNZ’s Hamish Cardwell. The main reason for this week’s failed auction is likely the government’s ongoing ETS review, which is looking at ways “to put more emphasis on actually reducing gross emission rather than just planting trees” – a plan that is meeting stiff resistance from some Māori landowners, The Post reports (paywalled); Nadine Anne Hura has a useful explainer on the issues at stake here. The NZU price crashed at the end of the year after the government ignored Climate Change Commission advice that could have allowed the carbon price to rise. Now the government is out half a billion dollars and counting.
No fertiliser tax news is good news for farmers
Prime minister Chris Hipkins has ruled out introducing a fertiliser tax, citing strong opposition from the agricultural sector. But Richard Harman of Politik says opposition wasn’t quite as universal as you might think: “The tax was vaguely supported by Groundswell, the rural protest movement, which is predominantly supported by sheep and beef farmers,” he writes. “But livestock farmers in hill country do not use much nitrogenous fertiliser, whereas dairy farmers who use large volumes of urea were aghast at the idea.” Hipkins’ announcement coincided with a gloomy report from the Ministry of Primary Industries forecasting a decline in livestock numbers driven in part by “competition for farmland for afforestation (carbon farming)”. As Harman notes, this week’s second failed ETS auction may have relieved pressure on farmers “to plant forests on their hills”, at least for now.
Two more climate stories making headlines this week
On Thursday a coalition of 30 environmental groups launched Climate Shift, a campaign aimed at focusing attention on the global heating crisis as the election gets underway. Number one on Climate Shift’s 10-point action plan is “real emissions reductions”. Meanwhile, Treasury reported that tens of millions of dollars are still sitting in the Climate Emergency Response Fund (CERF), waiting to be spent. Climate change minister James Shaw told RNZ he was frustrated by the delays, but said they’re largely due to constraints on supplies and human resources, “rather than because people are sitting on their hands”.
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Nash report on its way today
The cabinet secretary’s report into Stuart Nash’s ministerial communications with donors is to be made public at 9am. After Nash was sacked for emailing business figures, including donors, details of private cabinet discussions in late March, PM Chris Hipkins asked cabinet secretary Rachel Hayward to review whether Nash had breached cabinet confidentiality rules in any other instance. Hayward has had access to “any letter, email, text, WhatsApp or Signal message from Nash,” in an effort to “identify if he had broken confidentiality and collective responsibility rules at any other occasion [and] to investigate if Nash ever acted with a conflict of interest”. The 23 page report will be accompanied by a release of communications with Nash’s donors, with Hipkins expected to give a response at his 11am media standup.
Tens of thousands spent on individual deportations
Immigration NZ is spending huge sums on deportations amid claims that airlines are rorting the system, Emma Hatton reports for Newsroom. Earlier this year the government spent $65,287, a record amount, on a deportation that required a single one-way flight to South Africa for the deportee and return flights for three airline security escorts. “The airlines say, yeah sure we'll carry that person but we're wanting three people to accompany [them] and this is our bill and Immigration just signs it off,” says immigration lawyer Aaron Martin, whose own client was recently deported over a drink-drive conviction at a cost of $57,000. “It was just the biggest load of bullshit I've ever seen in my life,” he says. Immigration NZ says “some costs relating to custodial deportations are unavoidable and outside of INZ's control”.
Redefining carbon farming in Aotearoa
Both farmers and environmentalists fear Aotearoa becoming a sea-to-sea swathe of permanent Pinus radiata plantations that collect billions of dollars of carbon sequestration credits for investors, but few create long-term jobs and become deserts for native flora and fauna to thrive. But it doesn't have to be that way. In this week’s episode of When the Facts Change, forestry consultant and carbon-farming veteran Mark Belton explains why a lot of farms just aren't economic and how plantations don't have to be just pine.
Click and collect
National has removed a number of Hollywood-inspired TikToks from the platform after Newshub found their use of movie clips could constitute copyright infringement.
More than 400 jobs are on the chopping block at polytechs nationwide, Te Pūkenga has announced.
The UK parliament’s privileges committee has released a damning report on former PM Boris Johnson and Partygate.
Duncan Greive addresses the fallout from RNZ’s Moscow-friendly editing scandal on a brand new episode of The Fold.
Multiple members of the NZ Academy of Fine Arts have quit in protest against a plan to sell its Wellington galleries (The Post, paywalled).
Karyn Hay’s resignation from RNZ followed a radio producer’s complaint about her alleged behaviour (NZ Herald, paywalled).
Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz.
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Sporting snippets
Kaikohe’s senior women’s rugby team say they are in shock after being thrown out of the club competition for alleged “repeated and serious” breaches of the union’s code of conduct.
Mt Smart Stadium will be renamed “Daniel Anderson Stadium” for one night when the Warriors host the Manly Sea Eagles in August.
It’s Friday, so…
It’s time to get excited for 2 Cents 2 Much, The Spinoff’s new youth-focused current affairs show hosted by the inimitable Janaye Henry, coming June 20.
