OnPoint by Keith Ng


Nick Smith. Spanking. Now.

On Q&A on Sunday, Nick Smith claimed that Greenpeace's campaign for a 40% emissions reduction was unaffordable, and cited a report showing that it would have “a cost of about $15 billion per year at 2020”, or $60 per person per week.

This is catastrophically bullshit. The report cited by Smith wasn't even about emissions reduction!

It was a report about carbon credit allocation, which the authors note (in big bold letters in the “Key Points” section in the first goddamn page):

With international trading, New Zealand’s AAU [aka carbon credit] allowance... [is] not analogous to a domestic emissions target.

In case it wasn't clear:

To be clear, this report investigates the impact of changes in New Zealand’s AAUs under the framework of an international agreement whereby New Zealand takes responsibility for any emissions above a given amount. This is not the same as investigating different domestic emissions targets and should not be interpreted as such.” (Emphasis added.)

The point is hardly ambiguous: NOT DOMESTIC EMISSIONS TARGETS.

In fact, in all the scenarios discussed in the report, New Zealand's emission was held at 87.7Mt. Every single one of those scenarios assume the same level of emissions!

That's because the report was investigating how New Zealand would fare at different levels of carbon credit allocations. Carbon credits are worth money. So the more we get “for free”, the richer we'd be – obviously. If we didn't have enough, we'd need to buy them from other countries; this would hit our balance of payments and exchange rates, and that'd make us poorer.

When the report said that “40%” would cost $15b, it meant that if our carbon credit allocations were reduced by 40%, and our emissions level was unchanged, then it could cost New Zealand the equivalent of $15b.

So the cost that Smith talks about is categorically NOT the cost of cutting New Zealand's emissions.

It is the opposite. It is the cost that New Zealand could face if we DON'T cut our emissions. Every unit of emission that we reduce now is a unit that come off this “$15 billion” price tag that Smith talks about.

Of course, the “$15 billion” was the worst-case-scenario. It's not outlandish, but it's definitely on the high end. But since Smith thought it was a reasonable enough scenario to use for his own ends, I'm happy to hold him to it:

According to the analysis that Nick Smith has been waving around, if we keep to the current emissions trends, it will cost us $15b per year – or $60 per person per week – by 2020.

Of course, cutting emissions will cost money too. But it'll be offset by the reduction in the carbon credits we have to purchase. That's the whole point of an emissions trading system.

That Smith managed to get it so spectacularly wrong is either gross dishonesty, or an abject failure in reading. Either way: SPANK!

(Irony points: The press release accompanying the release of the report: “New reports help inform climate change policy.”)

(Apology: Sorry for the gratuitous bolding and exclamation marks. I get pretty worked up about these things. If you were listening to this in person, you'd have spit in your face and some hearing damage.)

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