Government plans to reduce greenhouse gas emissions could have severe environmental side-effects unless urgent changes are made, a new independent assessment shows.
The Government has been told to rethink the use of electric vehicles, the introduction of mandatory biofuels and the length of time before farmers are brought into its emissions trading scheme (ETS).
Labour late last year introduced legislation enabling the scheme, along with new rules limiting the amount of electricity produced from non-renewable sources and requiring oil companies to use minimum levels of biofuel in their products.
The scheme is likely to increase the price of petrol by at least another 5c a litre, and electricity by 4 per cent, the Government says.
The ambitious scheme is a big part of the Government’s aim to cut greenhouse gas emissions to 1990 levels and for New Zealand to become the first country to be carbon-neutral.
The scheme has been criticised by business groups, and the Parliamentary Commissioner for the Environment says the use of biofuels will result in a bigger carbon footprint than using fossil fuels alone.
A report by the Nelson-based Cawthron Institute, commissioned by the Government’s Emissions Trading Group, says gross domestic emissions are likely to continue to grow until 2020 even under the ETS.
The institute, an independent, not-for-profit research centre, says that notwithstanding any purchase of carbon credits by the Government on the world market to offset its emissions, the overall impact of the scheme is likely to be limited until 2013.
This is because demand for petrol and diesel is unlikely to slow despite price increases in the short term, there is a time lag before renewable electricity replaces fossil-fuel generation and because agriculture does not enter the scheme until 2013.
The report follows the release of data showing New Zealand emissions for 2006 totalled 77.9 million tonnes, half a million more than in 2005 and 20% higher than in 1990.
The institute says that unless the Government takes additional measures to enhance energy efficiency by businesses and households, invests more in public transport instead of building new roads, and considers bringing farmers into the scheme earlier, the gains it has boasted from the scheme are at risk.
The institute warns of “significant environmental effects” from the Government’s drive to lower greenhouse gas emissions, including the loss of indigenous ecosystems such as regenerating forest, scrubland and tussock grasslands, increased pressure to dam or divert rivers for hydro-electricity generation, and the effect on natural character and landscapes from afforestation and the use of wind turbines.
“Because it is so far-reaching, covering all sectors and all gases, the ETS-plus could also cause a range of unintended adverse environmental consequences unless response measures are put in place to address them,” the institute says.
“A significant move to electric vehicle technology could further increase this pressure.”
The institute also warns that people in low-income households could suffer health problems as a result of energy price rises.
It says central and local government assistance to such households will be necessary to minimise the possibility of the scheme exacerbating New Zealand’s “cold-home syndrome”.
The report’s lead author, Jim Sinner, said there were benefits from the scheme, including improvements in air and water quality, reduced soil erosion and a reduction in greenhouse gas emissions over the longer term.
Some of the benefits were at risk because of the delay in including agriculture in the scheme.
“There is a risk that these benefits will be lost if farmers don’t start factoring the future costs of emissions trading into their investment decisions now,” Sinner said.
Climate Change Minister David Parker said he welcomed the report, but it confirmed what he already knew. “Namely, that in addition to the emissions trading scheme, complementary measures will continue to be important in reducing New Zealand’s emissions and improving air quality, land use, biodiversity and water supply.”
The Cawthron report is the second this year to pour cold water on the Government’s climate-change plans. In February, Wellington consultancy company Infometrics said the plans could cost up to $8 billion, push petrol prices up by 50% and still fail to meet emissions reductions targets. That study was funded by the Business Roundtable.
The Cawthron Institute’s recommendations:
* Strengthen energy-efficiency measures.
* Implement national guidelines to protect natural resources from degradation.
* Increase promotion and funding of public transport.
* Urgently assist councils to identify and protect areas of natural character and landscape.
* Consider the likely flow-on effects of increased use of biofuels and the use of electric vehicles on the environment.
* Consider bringing agriculture into the emissions trading scheme earlier.
By Colin Espiner
30 April 2008