Environmental economist and longtime emissions trading
researcher Dr Suzi Kerr spoke at the University of Otago
yesterday. PHOTO: GERARD O’BRIEN
New Zealand had a world-leading emissions trading scheme
until it went off the rails in 2012, and we can have one again,
environmental economist Dr Suzi Kerr says.
Dr Kerr, a senior fellow at
Motu Economic and Public Policy Research in Wellington, was
‘‘heavily involved'' in the design of New Zealand's initial
carbon emissions trading scheme (ETS).
She was in Dunedin yesterday as a visiting lecturer for a
University of Otago summer law course on the international
response to climate change.
New Zealand's ETS has been the subject of criticism by some
local academics after the price of carbon credits - the
currency of an emissions trading system - dropped to a $1 per
tonne of carbon by December 2012.
The price of carbon credits dropped internationally because
of an influx of cheap credits into the international system,
but New Zealand took until May 2015 to take action and close
the domestic market to international credits. That had been a
mistake, Dr Kerr said.
‘‘They could've stopped the international units
earlier.''Even worse, ‘‘they announced they were going to ban
the international units, but then the ban didn't actually
come into force for a long period.''
‘‘They should've come in and
limited the units [immediately].
During that time period, people knew there are now two
different sorts of units.
‘‘There are international units, and there are New Zealand
‘‘New Zealand units can be put in a bank and kept and used at
any time, whereas the other ones can only be used until the
end of May 2015.
‘‘So what are you going to do? You're going to use the ones
that are going to expire and cost 17c, and you're going to
buy as many as you can and use them up, and you're going to
keep all of your New Zealand units.‘‘And that's exactly what
The ETS here has also taken flack for excluding
‘‘biological'' emissions - such as methane from cows - which
make up about half of all New Zealand's total greenhouse gas
Dr Kerr said including biological emissions was a
possibility. The ETS was under review, and the question of
biological emissions was on the table.
But even if the agricultural industry continued to mostly
escape the grasp of the ETS, that did not mean its emissions
would continue to go unchecked.
‘‘[The ETS] is not the only instrument for biological
emissions ... we should continue to have a discussion of if
agriculture should go in the ETS, but it's not the only thing
we can do - and research isn't the only thing we can do,
because that's the Government's usual line.''
Instead, looking at paring back the country's dairy and meat
industry might be part of the solution, she said.
‘‘We do a lot of research on cows, and how we can make cows
more efficient from a greenhouse gas point of view, but what
about growing something different on all our very nice flat
land ... ?
‘‘We've got a lot of land that in other countries would never
be used for grass. Livestock may be really good uses for
that, but there may be other things we haven't even looked
Dr Kerr also suggested New Zealand could contribute to
reducing greenhouse gas emissions worldwide in a different
way: by being a ‘‘world leader'' in policy innovation.
‘‘Because we're so small, our biggest contribution is how we
influence others,'' she said.
‘‘We had this ETS which, for a while, was world-leading, but
nobody knows anything about it.''
The suggestion was at loggerheads with Prime Minister John
Key's repeated assertion that New Zealand would be a ‘‘fast
follower'' on climate change action, Dr Kerr said.
‘‘He wants to present us that way - that's fine. We have the
ability to be a global leader. We have things to offer.''