The hidden costs of the Kyoto gambit
SMH.com.au August 4, 2005
New Zealand is finding out just where its foot has landed, writes Miranda Devine.
MOSMAN ratepayers must be thrilled to find themselves portrayed as "big foot" eco-gluttons by their council. My vegetarian colleague John Huxley bravely revealed this week that his fellow Mosmanites consume more than six times their share of the Earth's resources.
He knows this because Mosman Council has expended lots of energy calculating its residents' average "ecological footprint" - the amount of land and water needed to provide resources for one person and dispose of the waste. Lifestyle aspects, from food to holidays, were factored in.
While the "sustainable global average" ecological footprint is 2.3 hectares a person, the "yeti yachties from the north", as Mosmanites are now dubbed, take up a huge 14.7 hectares, almost twice the Australian average.
Naughty, naughty Mosman.
But in truth, the ecological footprint smells like just another tool of social control that leftist green ideologues love. Fly overseas for a holiday or eat meat, and your ecological footprint balloons. Your only hope is to move into a cave, graze vegetable matter off the ground, and die young and childless.
The Kyoto Protocol has proved to be the same sort of feelgood gimmick, only much more costly. It is backfiring on some of the well-meaning countries such as New Zealand, which signed up. The treaty, which came into force in February, aims to reduce greenhouse gas emissions in participating developed nations by at least 5 per cent by 2012, compared with 1990 levels. The European Union system of carbon trading, which underpins the treaty, began on January 1.
In some green eyes, Australia was a pariah for refusing, with the United States, to ratify the treaty. We still pledged to meet reasonable self-imposed greenhouse targets but without risking penalty or exposure to the burgeoning carbon trading market.
Judging by New Zealand's predicament, we were wise not to sign up for Kyoto. Our Kiwi neighbours, once smug about ecological superiority, face a cost blow-out from the treaty exceeding $NZ1 billion ($900 million).
Kyoto has become an election issue in New Zealand, with the Opposition Nationals contemplating pulling out of the agreement. The farcical result is that even though the country produces only 0.2 per cent of the world's greenhouse gases, it is to be punished as if it were a big polluter because it is unlikely to meet its emission targets. The Government has admitted it will exceed its Kyoto target by 36 million tonnes of carbon dioxide between 2008 and 2012.
In their enthusiasm for the project, New Zealand officials miscalculated carbon dioxide inputs and outputs, claiming there would be a net profit in carbon credits from the treaty. They reportedly counted some forests twice and didn't account for increased car use due to a booming economy.
So, instead of profiting by being a global green goodie, it will have to buy carbon credits to meet the shortfall, which will cost as much as $NZ1.2 billion, a report by PricewaterhouseCoopers says. Worse, a consultant's report released by the industry group Business New Zealand last year calculated a future liability of as much as $NZ14 billion under the protocol over the next 20 years.
To cap it all off, the new market in carbon credits has led to threats to the environment, such as a plan to dam the tiny Waitahuna River in the South Island, where water would be pumped uphill into a nearby hydro-electric scheme; there is little energy upside but the plan would still attract carbon credits because it creates "clean" hydro energy.
As carbon has taken its place in the derivatives market alongside pork belly futures and stock options, trading has "exploded", reports Bloomberg. It is tipped to become the biggest financial market in the world. Prices this year in Europe more than quadrupled from just over ?6 ($10) a tonne in January to almost ?30 in July. But the complexities of this new market which Kyoto has spawned don't seem to have provided much environmental advantage. Carbon trading just shifts the responsibility for pollution around the globe, with brokers skimming off fat commissions.
A 2002 study by the non-profit Clean Air Trust of three similar pollution trading schemes in the US found they were a "dismal failure". They did not produce environmental benefits, stifled innovation in pollution controls, and led to delays and secrecy.
The Prime Minister, John Howard, last week declared Kyoto a dismal failure, too. He has set Australia's sights on a new climate change pact with the US, Japan, China, India and South Korea, the Asia Pacific Partnership on Clean Development and Climate, which will meet in Adelaide in November. The aim of the new group is to cut emissions by encouraging new technologies rather than curtailing economic growth. And since the US produces 20.6 per cent of global greenhouse emissions, and China 14.8 per cent, according to the Pew Centre on Global Climate Change, any treaty that includes the two nations is already ahead of one that doesn't. (Australia produces just 1.4 per cent.)
But green groups have already claimed the new pact is a "convention of polluters" designed to wreck Kyoto and pander to the coal industry.
Meanwhile Greenpeace doesn't see New Zealand's billion-dollar Kyoto blow-out as a problem, demanding the nation "reduce its emissions urgently".
Stop driving cars, Kiwis, or move to Mosman.
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Originally Posted by Lou Girardin
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