Climate Commission warns high-emissions coronavirus spend-up will spark new crisis
The Climate Change Commission the expert panel tasked with getting New Zealand carbon neutral has written to the government asking it to apply a "climate change lens" to the post- Covid-19 spend-up. In a letter to Climate Change Minister James Shaw, the commission warned that locking New Zealand into a high-emissions future "will only compound today's crisis with a future one". "An economic stimulus package can either speed up or stall our progress on climate change," said the letter . The commission is worried about boosting emissions, but also concerned that the wrong investments will make people and costly infrastructure more exposed to damage from climate change. READ MORE: * Wellington's traffic pollution drops * Reducing emissions starts at home * Countries ranked on climate action * The Forever Project: full coverage The letter was copied to Finance Minister Grant Robertson and several other ministers as well as Shaw. While it was too soon to supply a list of climate-friendly projects, it said, the government should follow certain principles. These included saving on future spending by accelerating climate change investments that need to happen anyway, and investing in educating and retraining workers so they're ready for jobs in a low-emissions economy. One of the commission's specific concerns was that Covid-19 would derail reform of the Emissions Trading Scheme (ETS). That should not be allowed to happen, the letter, signed by commission chair Rod Carr, told Shaw and the others. The ETS is supposed to lower emissions by putting a price on greenhouse gases, however low prices, free allocations and exemptions have hampered its impact. Even assuming the scheme is strengthened, Carr previously said he believes pricing carbon will only be "a wee piece" of the climate solution, at least in the next five to 10 years. The United Kingdom has successfully lowered its emissions by using carbon budgets designed by a climate commission a set-up similar to New Zealand's. Yet in Britain, "they think pricing carbon emissions might have accounted for 10 per cent of their reduction," said Carr. In New Zealand: "If you look at the Ministry for the Environment's work, even at $50 per New Zealand Unit [twice the current emissions price] the lowest decile households' weekly spending would change by $2.40 per week and the highest decile by between $3 and $4, so the price impact at the household level is pretty modest," he said. "If you then factor in that only half of our emissions are in the ETS anyway, and then you think about the free allocations, you've got some pretty muted price signals," he said. "As a consequence you can't assume the ETS is going to do a lot of the heavy lifting here." The ETS currently excludes agriculture, which produces roughly half the country's emissions, and allows industrial emitters substantial free credits. Carr said the ETS remained an important policy despite its light touch. "Let's not undermine the ETS. We do believe pricing can play a part. The question for us (at the commission) is, what do we assume that part will be, particularly in the first two (emissions) budgets?" In recent weeks, a variety of environmental groups and professional bodies, such as Lawyers for Climate Change Action, have called on the government not to repeat mistakes made in 2008. Then, governments' responses to the global financial crisis derailed climate change action and weakened the ETS in the name of strengthening a weak economy. The Climate Change Commission is inviting public participation as it works on its first draft carbon budget, due in February. Once the budget is out, the government will decide whether to adopt it. The commission will report each year on how well the country is tracking. Carr said work on the budget had to press on, despite it being harder than usual to model how people would act in the future. Petrol prices have fallen, and spending is down, and the length of those impacts isn't yet clear. "We can't stop the clock on climate change just because it's become a little harder," he said. "We know we have to reduce emissions, we know have to reduce them quite a lot and we know we need to get on and do it now." "As a relative newcomer to working in climate, one thing that's been slightly surprising to me how much is already underway across New Zealand," he said. "It's not like everyone's waiting for the Climate Change Commission to cast its spell."