In our last episode, Sheriff Cabinet Ministers, in the wild west town of Aotearoa, turned away from using his trusty ETS sidearm to confront the destructive Climate Breakdown Gang.
Things have changed since then. There is a new Mayor in town and the Breakdown Gang has wreaked havoc on the Hawkes Bay grocery, the Auckland livery and the Northland Ranch. They’ve slashed up Tairāwhiti. Will he confront them this time? We’ll see in this next, exciting episode.
Camera zoom into the sheriff’s office on Main Street:
Sheriff Ministers is having his toast and tea when Deputy Greenie Shaw bursts in.
Greenie: “Sheriff, it’s a mess out there. The grocery and the livery are all bashed up and now I’ve got Commissioner Carr asking why we didn’t use the ETS on the Breakdown Gang.”
The sheriff leans back and takes a bite of toast, “Just tell Carr that it’s complicated, we gots lotsa irons in the fire”.
Greenie: “That’s what I told him before, but he wants more spee-cifics. Should I tell him about the…”
Sheriff: “No, don’t mention nothin’ ‘bout the ‘lection. He’ll just think we’re a pack of coyotes who think ‘bout nothin’ more than holding on to our day jobs and sounding ‘portant.”
“Besides, that ETS don’t seem to work anyway. I took it out to the Unit Auction for a test fire and it didn’t work. I think it was may be a problem with the reserve price…”
Shaw looks incredulous, “Didn’t work? What are we going to use against the Breakdown Gang?
Shaw takes his hat off and sits down, pressing his temples.
“How about the Biofuels Mandate?”
The sheriff sips his tea, “Nah, Mayor Hipkins nixed that.”
“The Cash for Clunkers deal to get the high emissions vehicles off the street?”
Sheriff: “Gone too.”
Greenie: “Expansion of public transport?”
Greenie: “Maybe the light rail for Auckland?”
Greenie: “Surely, we could at least put back the petrol tax. You know, cheaper petrol is playing right into the Breakdown Gang’s hands.”
Sheriff: “Not gonna to happen. Hipkins has made some changes round here.”
Greenie: “So, what we gonna do? The situation’s getting dire out there! People are hurtin’!”
Sheriff: “Well, the mayor has sent around some bread and butter. Maybe that will help. It’s awful good. Here, try some… If he keeps giving these out, maybe he’ll win that ‘lection.”
The sheriff hands Deputy Shaw a slice of toast. Shaw looks on in stunned silence.
Camera fade to credits…
So, dear reader, the situation in Aotearoa is looking grim. As you will recall, cabinet decided in December to ignore the Climate Commission’s advice and kept the Emissions Trading Scheme (ETS) price settings low for this year. As a result, the price of emissions credits fell so low that the last two quarterly unit auctions actually failed. Not enough bids achieved the minimum price set by the Ministry. No emissions credits were sold.
Compare this to last year, when a quarterly auction hit the cost containment reserve price triggering the release of extra credits and emissions unit prices were at an all-time high. The price of emissions units has been steadily rising in the last few years, as intended.
A failure of the auction is a little bit of good and a lot of bad. Good because it means industry will need to buy the credits they need to surrender for their emissions from the secondary market, soaking up some of the surplus units that Climate Commission has been worried about, but bad because the government didn’t raise any revenue for the Climate Emergency Response Fund like it expected.
It’s also really bad because the price for a tonne of CO2 emissions has fallen from a high of around $85 late last year to a low of $60 now. Releasing greenhouse gas into our atmosphere has just gotten a whole lot cheaper.
And, there’s a whole lot more uncertainty in the ETS market right now. Companies planning to upgrade coal boilers to electricity or wood chip will now look at their balance sheets and wonder if it is still a good idea. It’s maybe going to be cheaper just to pay for more credits, if the price stays low. Yet another delay in the transition to a low emissions future.
So, the Climate Breakdown Gang appears to have won this round in Aotearoa, and will have plenty of rein to continue its havoc. I suppose we can all thank the new mayor for our bit of bread and butter, at least until the Climate Breakdown Gang comes back. And, you can rest assured, they will be back.
by Tom Powell – Climate Karanga Marlborough