Editorial: Softly, softly way to go on Kyoto treaty

Forgive the livestock farmers of New Zealand for the pained and puzzled look that has crossed their collective visage. They must be sorely perplexed by the Energy Minister, Pete Hodgson, who has been nothing but accommodating towards the Russians over their delay in ratifying the Kyoto Protocol while berating the farm lobby over the urgency of dealing with global warming.

Mr Hodgson was not at all concerned at President Putin's statement that Russia was still carefully examining the issue and would make a decision when that work was finished. The Energy Minister thought that might be "several months" away. It could be a good deal longer. And there are no guarantees that Russia will decide to ratify a treaty on which both the United States and Australia have turned their backs.

New Zealand rushed headlong into ratification of Kyoto, creating huge uncertainty among companies in this country interested in investment in the energy sector but at a loss to determine the effect of yet-to-be-set international carbon credits. That precipitous action was followed by the hollow sound of the "flatulence tax" to fund research into livestock methane emissions - in effect forcing farmers to pay for studies that will increase their tax burden. All in the virtuous name of protecting the planet.

All but a few argue the need to reduce "greenhouse gases" and, irrespective of whether one accepts the theory of global warming as opposed to climatic cycles, it makes clear common sense to reduce emissions to 1990 levels. The World Climate Change Conference, the venue at which President Putin poured cold water on swift ratification, has seen scientist after scientist warn of future calamity unless trends are reversed. Many would say it is folly for countries such as the US and, perhaps, Russia to stymie moves to reduce global warming. That may be so but there is a more immediate reality. The New Zealand Government's folly was to commit itself to the obligations of Kyoto long before it was clear that the treaty would survive.

It is unclear whether President Putin's stand-offish remarks mean "not yet" or "nyet" but the survival of Kyoto certainly gains no greater assurance from the Kremlin's latest comments. Mr Hodgson points to the benefit that Russia could receive as a net holder of carbon credits it could sell to countries with a deficit. However, Moscow may have as much or more to gain from siding with Washington on the issue. Certainly there are suspicions that is the way Australia viewed the issue of ratification.

For his part, Mr Hodgson has adopted a sangfroid manner: we can wait for Russia's ratification, energy investors can wait for clarification. Even the fight with the farmers has taken on a less-heated tone amid suggestions that the impost on farmers may be much less than the expected $8.4 million. In spite of his stated optimism over Russia eventually becoming a full signatory to Kyoto, perhaps he is beginning to see the wisdom of a slowing-down in applying the protocols here.

Such a tactic, which need not stop moves to protect the environment, may be wise. There is nothing to be gained by righteous obedience to an international accord that will disintegrate without the support of President Putin's Government. Reducing the pace will not, however, help would-be investors in energy generation. They are in limbo and there are few signs that the issue of carbon-credit values will be resolved fast enough to stop some of them putting their money elsewhere. It is questionable whether the exchange rate of this new form of "currency" can be resolved fast enough or well enough for the Russians to commit to a treaty that will work only if enough international weight is behind it.