Embarrassment, Shame and Self-Inflicted Pain

They are Laughing at Us Over Here

Yesterday we posted on the unbelievable hubris that has led this country to its proposed Emissions Trading Scheme. But, at least we are partially fulfilling the megalomaniac dreams of the Prime Minister, Helen Clark. New Zealand has been acknowledged by The Wall Street Journal, one of the world's most influential and widely read newspapers, to be indeed leading the world. In folly.

The Journal believes that emissions trading schemes are risky and that using them to ensure conformity to Kyoto is likely to be catastrophic. But it is thankful that New Zealand has the crass stupidity to be willing to demonstrate the case. Rather them than us, is the idea. Good one, New Zealand. Thanks.

Courtesy of The Hive, we reproduce below yesterday's Wall Street Journal editorial.

Kiwi Climatology

Global-warming alarmists tend to understate the true costs of cutting greenhouse gas emissions. So give credit to New Zealanders, who seem poised to give the rest of us a real-life illustration of those costs.

This month Wellington is debating a cap-and-trade scheme to meet its Kyoto Protocol targets. Because New Zealand is already a low carbon dioxide emitter, the bulk of its emissions come from agricultural sources, such as, well, sheep. So the Government is proposing to implement caps not only on carbon dioxide from industry but also methane and nitrous oxide from farms. If passed, the Kiwi plan would be the broadest cap-and-trade programme to date.

As in smaller schemes in the U.S. and EU, the government would cap the country's emissions at a level allowable under Kyoto, and then distribute tradeable credits to businesses and farmers. Low emitters could sell excess credits, while high emitters could buy credits to cover their "extra" emissions. Under Kyoto, New Zealand committed to reduce its emissions to 1990 levels, in effect a 30% reduction from expected emissions in 2012.

Meeting those targets will be hard. New Zealand already uses a wide range of hydropower and renewable energy to cut carbon dioxide use. For the agricultural gases, new kinds of fertilizers might help, but only to a point. For the rest of the cuts, farmers will have to persuade cows and sheep to emit less - or have fewer cows and sheep.

The cost for farmers and industry alike, is likely to be prohibitive. The New Zealand Institute of Economic Research, and independent consulting firm, recently estimated that the government's plan would result in 22,000 job losses by 2012, or 1% of total employment. That translates into NZ$4.6 billion annually in lost GDP, or a NZ$3,000 cut in each household's annual spending.

This analysis assumes that as greenhouse gas fees make Kiwi industry less competitive globally, business and jobs will move overseas. The government disputes this conclusion, mainly because its own analyses assume [do they???] New Zealanders will be willing to take lower wages. That's debatable to say the least.

That aside, give the Kiwis credit for honesty. Having signed up to Kyoto they're actually talking about shouldering the costs of meeting their commitments. Whether or not they end up regretting it, other countries will now have a chance to see what the anticarbon crusade does to an economy.

Where is Harvey Keitel when you need him: "You said, 'No!' to Emissions Trading Schemes when the rest of the world was talking about them. You said, they would cause too much damage. I like that. It's good to know you take a stand where it counts."

Where is John Key when you need him? All we need from you, John, is Harvey's two letter word: No. This is surely a time when it counts.