Integrated Planning for Climate Action
A carbon budget is essential to planning for serious emission reductions. It details the expected carbon flows and how these can be reduced by practical actions. The more it is recognised that pricing instruments such as the ETS are simply tools, and the real action lies in how carbon budgets are set, the greater will be the interest in converting today’s implicit budgets into explicit ones.
New Zealand has emissions reduction targets but no plan to meet them. Pressure will mount on New Zealand to actually reduce emissions and achieve quantitative targets. Carbon budgeting takes those targets, assesses the options, and describes an overall plan for achieving them.
A Climate Commission would be responsible for working with stakeholders to explore options and their costs, in order to devise sector action plans that build into budgets. Carbon budgeting becomes the process that integrates the ETS, complementary measures, and financial limitations. It is set to become the commanding heights for domestic climate action.
Carbon budgets are cast in the measure that ultimately matters – tonnes of carbon. Rather than being denominated in dollars, as far as possible they track real flows of carbon. This cuts through many of the problems that arise from accounts based on carbon credits.
It is not useful to imagine being just a ‘fast follower’ when New Zealand is facing an emissions cliff. Early action needs to be taken to get a head start on reducing the incline and building resilience to shocks.
Carbon budgeting provides a mechanism to cope with a world that currently places little importance on effective international action, and a future one that could require countries to quickly take on serious commitments.
The Carbon Budget Deficit (2012)