Fran O'Sullivan: Groser may find his hands tied

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Tim Groser will be under no illusions that the global climate negotiations - as currently structured - are heading towards gigantic failure.

The experienced trade negotiator won his international spurs years before he was appointed to John Key's Cabinet last month as Trade Minister.

Unfortunately, extreme sensitivities around the Cabinet table means that Groser - whom Key has also tasked with leading New Zealand's international talks on climate change - is having to cloak his negotiating ambitions with anodyne statements rather than openly table the fact that he wants to ensure that this country takes better care in future not to expose its vital agriculture industry to a kamikaze outcome in a vainglorious effort to "save the planet" (my words, not Groser's).

That is the upshot when 48 per cent of New Zealand's greenhouse gas emissions come from a single sector - agriculture - that also makes up 64 per cent of our total exports.

Unless we can come up with a geo-sequestration method for cows, New Zealand has to make sure the post-2012 Kyoto period takes a more holistic view of the vital role agriculture plays in sustaining humanity, particularly given projections the world population will double by mid-century.

Groser had been expected to issue a statement outlining New Zealand's negotiating stance before he left this week for the United Nations Climate Change conference.

A 2009 deadline has been set to give the international community plenty of time to agree new targets for reducing emissions before the Kyoto Protocol goals expire in 2012.

But despite strong statements by the Prime Minister last month underlining that New Zealand would seek special treatment for its farmers, the Cabinet minister departed without making a formal press release detailing just what the New Zealand position would be after the change of Government. My sources suggest that Groser's proposed statement was "too radical" for Environment Minister Nick Smith who still calls considerable shots in the climate space and it would appear is more disposed to tinkering with the current emissions trading scheme rather than challenging the basic assumptions underpinning the country's international stance.

Smith yesterday released the terms of reference for the special parliamentary select committee review of the ETS. Surprisingly - given National's stance during the election campaign which focused on the unbalanced impact of the current ETS on the weakened NZ economy and the need to safeguard New Zealand's trade-exposed industries so they remained internationally competitive - many of the terms of reference looked as if they were written by officials determined to preserve the status quo.

Consider the first four terms of reference:

Identify the central/benchmark projections which are being used as the motivation for international agreements to combat climate change; and consider the uncertainties and risks surrounding those projections.

Hear views from trade and diplomatic experts on the international relations aspects of this issue.

Consider the prospects for an international agreement on climate change post-Kyoto 1, and the form such an agreement might take.

Require a high-quality, quantified, regulatory impact analysis to be produced to identify the net benefits or costs to New Zealand of any policy action, including international relations and commercial benefits and costs.

All this before the committee gets down to the nitty-gritty issue which it ought to be examining which is whether New Zealand can survive the economic impact of introducing an "all sectors, all gases in" emissions trading regime given the dominance of agriculture.

The only saving grace is the absence from the terms of reference of any requirement to examine the science to determine whether anthropogenic global warming actually exists (Act leader Rodney Hide will be disappointed) making it clear National will persist with the orthodox viewpoint.

Last month it looked as if Key was focused on introducing cold reality into the climate negotiations. He told the Dominion Post there had to be a recognition that some countries will find it easier to move than others. "If the only outcome was for New Zealand to be reducing its agriculture output only to see that output flow to another country ... where their carbon intensity might be greater, we might achieve the worst of all outcomes - a higher level of emissions, a lower level of output, greater pressure on food prices. This is a balancing equation."

The furthest Groser would go this week was to tell Radio New Zealand the discussions would include offsets for forestry and intensity-based targets for agriculture.

"An intensity target for agriculture would, for example, have dairy farmers liable for emissions produced per kilo of milk solids rather than total emissions." Frankly, this is pussy-footing.

Already reports have emerged from Poznan that delegates are singling out the international recession and switch to the Obama Administration in the US as factors which had made it most unlikely that the 2009 deadline for a new pact to fight global warming would be met.

That the UN delegates should fall prey to an outburst of realpolitik should not surprise. Developed nations' greenhouse gas emissions are expected to fall by up to 2 per cent next year, easing the political pressure for urgent action in much the same fashion that Helen Clark's Government cited soaring oil prices and domestic recession here as the rationale for delaying for 12 months the entry of transport into this country's emissions-trading scheme.

In Parliament yesterday, Key again affirmed that efforts to reduce greenhouse gas emissions here must be matched by efforts to reduce emissions elsewhere.

Undercutting his political opponents' ambition to portray his Government as soft on climate change, he spelled out it would in fact honour "its" Kyoto Protocol obligations and work to further global alliances that built on the Kyoto goals.

The speech from the throne noted: "In approaching future international climate change negotiations it will work with fellow countries on finding a pragmatic way to include large emitters like China, the United States, India and Brazil.

"My Government will also advocate firmly in international negotiations for the appropriate recognition of New Zealand's unique agricultural-emissions profile. This push will be buttressed by increased public investment in research and development to reduce greenhouse gas emissions from livestock."

Frankly, Groser will find it difficult to deliver on Key's agenda if his work is circumscribed by Smith putting so much focus on the international stance on to the select committee's plate.

Let's hope committee chairman Peter Dunne sees through the games playing and puts the economic terms of reference centre-stage. The sooner New Zealand addresses the need for a transitional carbon tax instead of an unrealistic ETS the better.

- NZ Herald

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