Posts by Matthew Smith
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Keith, you're usually very good at this, but in this instance you're just plain wrong.
Two things:
1) The allowance of AAUs is not equal to a domestic target.
Well yes, but it's a good proxy; Unless you assume we can't use international trading to meet our domestic target. If you want to take that stance then the cost is going to much much higher than the $15bn Nick Smith's been bandying about (because by and large domestic emissions reductions cost more than overseas emissions reductions - bullet 4, page 16 ).
The other reason its a good proxy is that the international target is actually binding, unlike the domestic target. So it models what it costs to actually meet it.
2) You said that all the scenarios assumed New Zealand's emissions were 87.7 Mt.
This is just wrong.
The scenarios measured the emissions deficit against a BAU case of 87.7 Mt, but assumed that it would be met by a mix of domestic reductions and purchases of units from overseas.
To reiterate: All the scenarios assumed some domestic emissions reductions. You can tell because in each table is a row that says ' Domestic emissions reductions.' From page 16:
"In all scenarios, the 2020 target is met by both domestic reductions and purchasing further permits from other countries."So, no, the report did NOT assume that our emissions level was unchanged.
The figure Nick Smith is using might not be the cost of reducing emissions, but it is the cost of meeting the target, with emissions reductions both here and overseas.