New Zealand, in step with many other countries, has voiced its grave concern over the United States' abandonment of the Kyoto Protocol on greenhouse gas emissions. There was good reason for disappointment, and not only because President George W. Bush's decision left the fight against global warming in tatters.
New Zealand stood to be a leading beneficiary of one of the protocol's cornerstones, the international trading of emission credits. Countries would have been able to sell excess emission credits to others that found it more difficult or expensive to reduce their emissions. New Zealand, boasting few smokestack industries, increasingly resplendent in carbon-sink pine forests and with most of its power hydro-based, eyed a quota trading regime from a position of strength. Now, however, it must guard against any impulse to strike out alone and hastily ratify the protocol. That would be a recipe for competitive weakness.
The Minister of Energy seems aware of the danger. New Zealand will not, says Mr Hodgson, take what would amount to futile unilateral action. Effectively, he is scrapping the Government's original plan to ratify the Kyoto Protocol by the middle of next year. Without the credit trading regime, New Zealand, in fact, has nothing to gain.
But Mr Hodgson will need to stick to his guns. There is bound to be pressure from those who believe our clean, green image would be enhanced by ratifying the protocol - thereby binding the country to cutting its emissions of greenhouse gases back to 1990 levels over the next 10 years.
Ratification would, at best, amount to a worthless gesture. At worst, however, it could be extremely damaging. New Zealand's position must be kept in perspective. It creates about one-fifth of 1 per cent of the world's greenhouse gas emissions. Anything done here will have little impact on the global picture.
Likewise, an early New Zealand ratification would not spur others to follow suit. Nations responsible for 55 per cent of carbon dioxide emissions by developed countries must ratify the protocol for it to take effect. So far, only one - Romania - has acted. But its ratification was merely symbolic. Emission targets aside, the protocol remains incomplete and ill-defined, so much so that even the likes of Norway and the European Union have yet to ratify it.
There will be an inevitable price for countries that choose to go it alone. Meeting the protocol's emission targets involves measures - perhaps carbon taxes in some instances - that will harm their industries' competitiveness. New Zealand's forestry industry has already warned of the danger. Investment in timber processing might even be discouraged because processing adds to emissions.
Getting ahead of the pack in ratification would exacerbate problems that loomed in any event because the Kyoto Protocol imposed no obligations on key timber-exporting competitors such as Chile. Companies looking at setting up in New Zealand would, similarly, look askance. Again, ratification would impose costs that did not apply elsewhere. The New Zealand economy would be the loser.
That, of course, does not mean that greenhouse gas emissions should not be tackled locally. The Government has recognised as much in the draft energy efficiency strategy released this week. That document suggests that most businesses could cut their energy consumption 20 to 30 per cent through cost-effective efficiency measures. A 20 per cent improvement alone would go halfway to fulfilling the requirements of the Kyoto Protocol on gas emissions
A balanced approach might see the Government seeking binding emission agreements with major industries alongside measures that cut congestion on Auckland's roads. Cars and trucks contribute 15 per cent of New Zealand's greenhouse gas emissions and are the fastest-growing source. A low-level carbon charge on road users is always a possibility.
In the wake of President's Bush's rejection, the Kyoto Protocol lies dead in the water. Whether it can be resuscitated is highly debatable. Certainly, this is no time for idealistic gestures. Major industries appear ready to accept the steady development of a package of greenhouse gas measures. That is the best way for New Zealand to safeguard its clean, green image. Other countries will not be rushing to enforce rigorous emission targets that undermine competitiveness and dissuade investment. To go it alone now would be foolhardy.
Herald Online feature: Climate change
Intergovernmental Panel on Climate Change
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United Nations Environment Program