A new carbon credit trading deal reached in the final hours of COP29 in Baku, Azerbaijan, has been criticised as a free pass for countries to slack off on efforts to reduce emissions at home.

The deal, sealed at the annual UN climate talks nearly a decade after it was first put forward, will allow countries to buy carbon credits from others to bring down their own balance sheet.

New Zealand had set its targets under the Paris Agreement on the assumption that it would be able to meet some of it through international cooperation — “so getting this up and running is really important”, Compass Climate head Christina Hood said.

“It’s a tool, it’s neither good nor bad, but there’s going to have to be a lot of scrutiny on whether the government is taking a high-ambition, high-integrity path, or just trying to do the minimum possible.”

The plan had taken nine years to go through because countries determined to do it right had been holding out for a process with the right checks and balances in place, she said.

As it stood, countries would have to report yearly to the UN on their trading activities, but it was up to society and other countries to scrutinise behaviour.

Cindy Baxter, a COP veteran who has been at all but seven of the conferences, said it was in-line with the way Aotearoa New Zealand wanted to go about reducing its emissions.

‘We’re not alone, but . . .’
“We’re not alone, Switzerland is similar and Japan as well, but certainly New Zealand is aiming to meet by far the largest proportion of our climate target, [out of] anywhere in the OECD, through carbon trading.”

The new scheme fell under Article six of the Paris Agreement, and a statement from COP29 said it was expected to reduce the cost of implementing countries’ national climate plans by up to US$250 billion (NZ$428.5b) per year.

COP29 president Mukhtar Babayev said “climate change is a transnational challenge and Article six will enable transnational solutions. Because the atmosphere does not care where emissions savings are made.”

But Baxter said there was not enough transparency in the scheme, and plenty of loopholes. One of the issues was ensuring projects resulting in carbon credits continued to reduce emissions after the credits were traded.

“For example, if you’re trying to save some mangroves in Fiji, you give Fiji a whole bunch of money and say this is going to offset this amount of carbon, but what if those mangroves are destroyed by a drought, or a great big cyclone?”

Countries should be cutting emissions at home, she said.

“And that is something New Zealand is not very good at doing, has a really bad reputation for doing. We’ve either planted trees, or now we’re trying to throw money at offset.”

Greenpeace spokesperson Amanda Larsson said she, too, was concerned it would take the onus off big polluters to make reductions at home, calling it a “get out of jail free card”.

‘Lot of junk credits’
“Ultimately, we really need to see significant cuts in climate pollution,” she said. “And there’s no such thing as high-integrity voluntary carbon markets, and a history of a lot of junk credits being sold.”

Countries with the means to make meaningful change at home should not be relying on other countries stepping up, she said

The Green Party foreign affairs spokesperson Teanau Tuiono said there was strong potential in the proposal, but it was “imperative to ensure the framework is robust, and protects the rights of indigenous peoples at the same time as incentivising carbon sequestration”.

It should be a wake-up call to change New Zealand’s over-reliance on risky pine plantations and instead support permanent native afforestation, he said.

“This proposal emphasises how solving the climate crisis requires global collaboration on the most difficult issues. That requires building trust and confidence, by meeting commitments countries make to each other.

“Backing out of these by, for instance, restarting oil and gas exploration directly against the wishes of our Pacific relatives, is not the way do to that.”

Conference overall ‘disappointing and frustrating’
Baxter said it had been “very difficult being forced to have another COP in a petro-state”, where the host state did not have much to gain by making big progress.

“What that means is that there is not that impetus to bang heads together and get really strong agreement,” she said.

But the blame could not be placed entirely on the leadership.

“The COP process is set up to work if governments bring their A-games, and they don’t,” she said.

“People should be bringing their really strong new climate targets [and] very few are doing that.”

Another deal was clinched in overtime of the two-week conference, promising US$300 billion (NZ$514 billion) each year by 2035 for developing nations to tackle climate emissions.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

New Zealand’s Climate Change Minister Simon Watts is going to the global climate summit in Baku, Azerbaijan next week, where he will be co-leading talks on international carbon trading.

But the government has been unable to commit to using the trading mechanism he is leading high-level discussions about, and critics say he is also vulnerable over New Zealand’s backsliding on fossil fuels.

New Zealand has consistently pushed for two things in international climate diplomacy — one is ending government subsidies for fossil fuels globally, and the other is allowing carbon trading across international borders, so one country can pay for, say, switching off a coal plant in another country.

Nailing down the rules for making sure these carbon savings are real will be an area of focus for leaders at the COP29 summit, starting on 11 November.

But as Watts gets ready to attend the talks, critics say his government is vulnerable to accusations of hypocrisy on both fronts.

In a bid to bring back fossil fuel exploration, the government wants to lower financial security requirements on oil and gas companies requiring them to set aside money for the costs of decommissioning and cleaning up spills.

The coalition says the current requirements — brought in after taxpayers had to pay to deal with a defunct oil field — are so onerous they are stopping companies wanting to look for fossil fuels.

Billion dollar clean-ups
At a recent hearing, Parliament’s independent environment watchdog warned going too far at relaxing requirements could leave taxpayers footing bills of billions of dollars if a clean-up is needed.

The commission’s Geoff Simmons spoke on behalf of Commissioner Simon Upton.

“The commissioner was really clear in his submission that he wants to place on record that he doesn’t think it is appropriate for any government, present or future, to offer any subsidies, implicit or explicit, to underwrite the cost of exploration.”

The watchdog said that would tilt the playing field away from renewable energy in favour of fossil fuels.

Energy Minister Shane Jones says the government’s Bill doesn’t lower the liability for fixing damage or decommissioning oil and gas wells, which remain the responsibility of the fossil fuel company in perpetuity.

But climate activist Adam Currie says that only works if the company stays in business.

“The watering down of those key financial safeguards increases the risk of the taxpaper having to yet again pay to decommission a failed oil field.

“Simon Watts is about to go to COP and urge other countries to end fossil fuel subsidies while at home they are handing an open cheque to fossil fuels  .. This is a classic case of do as a say, not as I do.”

Getting flack not feared
Watts says he does not fear getting flack for the fossil-friendlier changes when he is in Baku, citing the government’s goal of doubling renewable energy.

“No I’m not worried about flak, New Zealand is transitioning away from fossil fuels . . . gas [from fossil fields] is going to need to be a means by which we need to transition.”

Nor does he see an issue with the fact he is jointly leading negotiations on a trading mechanism his own government seems unable to commit to using.

Watts is leading talks to nail down rules on international carbon trading with Singaporean Environment Minister Grace Fu. Her country has struck a deal to invest in carbon savings in Rwanda.

New Zealand also needs international help to meet its 2030 target, but the coalition government has not let officials pursue any deals. NZ First refuses to say if it would back this.

Watts says his leadership role is independent of domestic politics and ministers around the world are keen to nail down the rules, as is the Azerbaijan presidency.

“Our primary focus is to ensure that we get an outcome form those negotiators, our domestic considerations are not relevant.”

Paris target discussions
He said discussions on meeting New Zealand’s Paris target were still underway.

His next challenge at home is getting Cabinet agreement on how much to promise to cut emissions from 2030-2035, the second commitment period under the Paris Agreement.

Countries are being urged to hustle, with the United Nations saying current pledges have the planet on track for what it calls a “catastrophic” 2.5 to 2.9 degrees of heating.

A new pledge is due for 2030-2035 in February.

A major goal for host Azerbaijan is making progress on a deal for climate finance.

Currently OECD countries committed to pay $100 billion a year in finance to poorer countries to adapt to and prevent the impacts of climate change.

Not all the money has been paid as grants, with a large proportion given as loans.

Countries are looking to agree on a replacement for the finance mechanism when it runs out in 2025.

Watts said New Zealand would be among the nations arguing for the liability to pay to be shared more widely than the traditional list of OECD nations, bringing in other countries that can also afford to contribute.

Oil states such as UAE have already promised specific funding despite not being part of the original climate finance deal.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

While attention is focused on economists finding a $500 million-a-year hole in National’s tax plans, a similar-sized hole in climate costings is hiding in plain sight — and it applies to Labour, too.

National appears to have the bigger gap, however.

The gulf was highlighted in the Pre-election Economic and Fiscal Update (PREFU) — Treasury’s official word on the state of the government’s books — which explicitly excluded the cost of meeting New Zealand’s international climate target under the Paris Agreement.

Asked how they would pay this week, politicians gave unclear answers. But the obligation was still very real.

Both Labour and National have said they are committed to meeting the country’s international climate target, known as an NDC (Nationally Determined Contributions).

Under the Paris Agreement, which covers almost every nation on the planet, New Zealand has promised to cut emissions by 41 percent off 2005 levels by 2030. Exporters and carbon market experts say failing to meet that pledge could jeopardise international trade — nevermind the fact that following the Paris Agreement is humanity’s best hope for avoiding more expensive and deadly heating.

New Zealand plans to meet its target in two ways. First, it will do as much as it can inside the country by meeting a set of “emissions budgets”.

No way to meet target
But when the Climate Change Commission ran the numbers, it concluded there was no way to meet the whole target with action at home. Because New Zealand started slow at tackling emissions, cutting transport, industry, farming and electricity emissions that quickly would cause too much economic pain, it concluded.

So there is also a second part to the target: buying carbon credits from overseas. Typically, economists assume this is cheaper than making cuts in emissions at home, though it depends on the project.

While no purchases will be made until after the election, the kinds of things that could qualify include retiring coal boilers in developing countries, or planting forests.

This is where the gap in the books comes in. Treasury had previously put the cost of buying these credits from overseas — and an estimated 100 million tonnes of them will be needed, at last count — at between $3.3 billion and more than $23 billion between now and 2030.

Even at the lower end of projections, it could work out at around $500 million a year.

Whichever way the government decides to do it, PREFU said the costs would be “significant” and will start biting “within the current fiscal forecast period”.

As things stand, according to Climate Change Minister James Shaw, one or possibly two rounds of purchases could be made in the next four years, with a third and final “washup” at the end of the decade.

Election may change timing
The election could change the timing, but whoever is in government will be expected to start showing progress towards meeting their Paris target well before the end of the decade, said carbon market expert Christina Hood from Compass Climate.

“There’s this common misconception that whoever the finance minister is in 2032 is going to have to get their chequebook out and square up by however much we missed by. It doesn’t work that way at all.

“Every emission (saving) we count has to actually occur during those years (before 2030), so we need to get on with funding that.”

Yet despite starting to fall due within the next four years, the costs did not appear as a liability on the government’s books. Nor do the major parties seem to be clear on how much to budget for them.

Bold claims, few details
This week, neither National nor Labour answered clearly how much they had planned to set aside for these costs nor how they intended to pay them. They instead focused their answers on wanting to cut planet-heating emissions more deeply inside New Zealand’s borders.

At times, politicians seemed to confuse domestic emissions budgets with the $3 billion-plus added cost of buying offsets to meet the Paris target, or they made heroic statements about how much they could do onshore, without supplying the figures behind them.

A quick reminder: the 100-odd million tonnes in overseas offsets that it was estimated we would need were on top of meeting New Zealand’s domestic emissions budgets, not instead of it. Only a truly incredible effort could meet the entire amount inside the country, requiring deep and fast climate action on a scale neither party has hinted at.

Currently, New Zealand is not even on track to meet its domestic emissions budgets, as Climate Change Commission chief executive Jo Hendy told a business and climate conference in Auckland this week.

“Latest projections show we are not on track in every single sector, so we are going to have to do more,” she said. “We are particularly reliant on pushing the dial in transport and in process heat.”

Yet when RNZ asked about the $3 billion-plus cost on the campaign trail, politicians appeared to be planning to overperform on those budgets, sometimes by impressive amounts. Their answers suggested they may not need to worry too much about that $3 billion-plus.

Here’s what Labour leader Chris Hipkins said, when asked if he had costed for meeting Paris: “We still have a way to go before we have to make a final decision on how best to meet our commitments there. We’re on track to meet our first emissions budget.

Working harder
“We’ve still got the second and third emissions reduction budgets to go. If we don’t meet our targets there is a period of time when we can figure out how best to remedy that, and that includes working harder in the second period to compensate for that.

“But we’re confident that with the stuff we’ve got in place at the moment, we’re on track to meet our first target.”

Hipkins did not address paying for offshore credits, which were required even if the country met all three domestic budgets. As prime minister, he rolled back a biofuel policy and, like National, has focused his transport promises mainly on building new roads rather than a strong shift to lower-emissions modes.

He has also promised help for home insulation and solar, but it was not clear if his new promises compensated for the cuts.

Asked the same question, National leader Christopher Luxon took aim at the government for undermining the Emission Trading Scheme (ETS), saying the scheme should do more of the “heavy lifting”.

He, too, skirted the question of paying for offsets.

For context, the ETS made polluters pay for around half the country’s domestic climate pollution (the other half was from agriculture) and was already factored into projections of needing 100 million-odd tonnes of extra ‘top up’ help from overseas.

The scheme could do more, particularly if carbon prices went higher (taking petrol prices with them), or if farming was included, or if there were no limits on planting land in cheap pine trees, but Luxon did not detail how National would navigate these kinds of changes.

Cutting domestic emissions
Meanwhile, other party spokespeople talked-up cutting domestic emissions.

Labour environment spokesperson David Parker told the conference in Auckland he wanted to look at claims that native afforestation could meet the entire Paris target (without overseas help).

National’s climate spokesperson Simon Watts told the same gathering — the annual Climate Change and Business Conference — that National believed it could meet 70-75 percent of the 2030 target inside these shores, a figure considerably higher than previous estimates by the Climate Change Commission.

Watts did not supply details on how that would be achieved, though he discussed lightening regulation on wind and solar energy.

His party has said it would scrap Labour’s Clean Car Discount and major grants to companies to switch off coal boilers, and it would also delay pricing farming emissions a further five years, until 2030. There were questions about how it would meet even the current domestic emissions budgets.

The cost of waiting
Hood had a spot of good news on the cost front. She told RNZ that based on recent purchases by Switzerland, the cost of overseas carbon offsets was likely to be towards the lower end of Treasury’s range.

Even if the government winded up buying 100 million tonnes of savings offshore, that was still only around half the quantity the John Key-led government expected it might have to stump up for when it made its first Paris Agreement pledge, despite the first pledge being weaker on climate than the current one, she noted.

But getting offsets at the lower end of the cost range relies on the government getting moving on lining them up and buying them, she says.

Shaw told RNZ that environmental integrity would be a bottom line after New Zealand was burned for buying valueless “hot air” credits from Russia and Ukraine in the early years of carbon trading.

As well as Switzerland, Singapore and others had already started striking deals to buy the offsets they needed.

While the New Zealand Government has been scoping out prospective sellers overseas, it has refused to reveal who it is talking to, citing commercial sensitivity.

The ministries for Foreign Affairs and the Environment were working on advice to Cabinet on how to make these purchases and ensure the carbon saved was real. But that advice will not land until after the election.

Most expensive time to buy
One thing is clear. 2030 will be the most expensive time to buy, Hood said, because many countries will be panic-buying from overseas projects to meet their missed domestic commitments. Shaw agreed.

“A whole bunch of countries will be going, ‘Oh crap, I’ve missed my target,’ and scrambling around trying to find ways to fill the gap.”

Shaw wanted Paris costs to go into PREFU, making it clear to the government that any money spent on domestic action on climate change was also a cost saving in terms of buying fewer offshore credits.

“This is one of the things that worries me about what some of the other parties are saying, is that they aren’t really accounting for [Paris] in their fiscal plans.”

Shaw called the huge variance in Treasury ‘s $3 billion-23 billion estimate “unhelpful”.

“It’s such a wide variance it’s hard to trust it. At the moment… people are putting their fingers in their ears and saying ‘lalalala”.”

But asked how much the Green Party had costed for meeting New Zealand’s offshore climate commitments, Shaw would not be drawn on naming a more accurate number.

Treasury estimate best
“The best estimate I’ve got is the Treasury estimate. The Ministry for the Environment and MFAT (Ministry for Foreign Affairs and Trade) are doing a lot of work on this at the moment, but they’re not going to have a report back until just before Christmas. If I was to give you a number I would be pulling it out of thin air.”

As for how to pay for it, Shaw said ETS proceeds from polluters could do a lot of it.

“In a good year that’s a billion dollars, so if there’s seven years for us to do that it’s $7 billion.”

But Shaw also acknowledged there were a lot of other calls on that money — including for adapting to climate change, paying for domestic carbon savings, and helping low-income families weather the costs of higher emissions prices, which boost fuel and electricity costs.

National has said it would use ETS proceeds to help fund its tax cuts, meaning it will need to pay for the Paris target (both the offshore and onshore parts) some other way.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

Papua New Guinea’s Justice Minister Bryan Kramer has confirmed that he has ordered his department — Justice and the Attorney-General (DJAG) — to investigate a complaint against the National Judicial Staff Service (NJSS) hiring highly paid overseas consultants.

Their wages are paid in Australian dollars and deposited in overseas accounts.

Kramer made this statement on the floor of Parliament when answering a series of questions from shadow attorney-general and Rabaul MP Dr Allan Marat during question time.

Dr Marat had asked what the status of the investigations are?

Were there breaches of the relevant laws, and why they are paid in Australian dollars and their salaries paid in overseas accounts?

Kramer said this initial complaint came via a written complaint as chairman of Judicial Legal Commission concerning contracts that were recently awarded within the judiciary to overseas consultants.

The complaint, he said, had a report attached that raised specific issues of amount of money being paid, to foreign contractors and payments being made overseas.

investigations are ongoing
The investigations are not complete and are ongoing.

Once complete a decision would be made about course of action would be taken, Kramer said.

“On the issues of public service it is important to note that these contracts were paid for private consultancy services so won’t fall [under] the regulation of public service,” he said.

Kramer explained that there was a query raised with the State Solicitor to seek clearance concerning whether or not these contracts were complied with legally and lawfully under the procurement processes.

“And the advice I understand provided by the State Solicitor is that, they exceeded the threshold within the jurisdiction of the judicial services to execute these contracts and provided an advice [on] whether to re-negotiate the contracts down to the threshold or to call for public tender on those contracts.”

He added that the concern was over the manner in which the contracts had been approved and the amounts involved in the contracts.

“There are specialised skills or experts around the globe that the state may engage from time to time — be it in oil and gas, and in any new legislative areas like in carbon credits,” Kramer said.

Significant fee
“These experts will attract a significant fee but justification will be on a short term contract where they may apply to come on a three to six month to provide that expert opinion and advice.

“These contracts were extended over a period of, I think 8 to 9 years,” he said.

“That’s another contentious issue that we are looking at.”

• What was the justification;
• What were the terms of reference for engagement of these contracts;
• What were the specific outcomes of these contracts;
• Why were they continually renewed — is it necessary to renew?;
• Why were they not advertised for Papua New Guinean experts or other experts, like under the European Union (EU); or
• Why did we not engage these consultants under the existing EU [arrangements] where they pay for the contracts and we don’t have to meet the costs.”

Kramer concluded that once the investigations were completed and if it was confirmed that there was non-compliance with legislative procedures, then a decision would be made by DJAG to terminate these contracts.

Republished with permission from the PNG Post-Courier.

Article by AsiaPacificReport.nz