Carbon HQ trader Paul Burgin says cabinet “threw the commission under the bus” and scuttled the country’s chance of reaching its net zero target with its decision, late last year, to reject the commission’s recommendations.

Last July the commission released its recommendations for changes to the ETS settings that would have seen a two-tiered trigger price for the cost containment reserve introduced with the first tier starting at $171 and the second tier at $214.

The first trigger point would have released 2.9 million NZUs and the second 5.1 million.

Instead cabinet opted for a single trigger price of just $80.64 – well below what NZUs had been trading on the secondary market for most of last year. 

The government did accept the commission’s recommendation for a total CCR of 35.2 million NZUs for the 2023-27 period.

The reserve price has been set at $33.06 just over half the $60 proposed by the commission. 

Cabinet’s decision has seen the price of NZUs on the secondary market drop to around $72 from a high of $88.50 in November last year.

Paul Burgin, who spent much of his working life as a commodities trader in the US, says it’s endlessly frustrating to see politicians acting as if climate change is something we can address in 30 years rather than right now

“This is me as a human being rather than a trader,” he says.

“As a trader it doesn’t matter whether the price is $50 or $500. Your job is to pick whether it’s going up or down.”

He says as a father he welcomed Jacinda Ardern’s “nuclear free moment” statement and felt at last we had a government that was going to take climate change seriously.

“The Climate Change Commission’s recommendations nailed it.” 

They recognised that carbon removal technologies are years away and we have to change behaviours and the best way to do that is through a higher price on carbon.”

Burgin says cabinet seems to have been spooked by high inflation into making the decision.

In contrast in Europe, where fuel prices have gone through the roof due to the Ukraine war, the carbon price has been left up to the market and as a result risen by more than 12% so far this year.

“We ought to have a climate change central bank that can act independently.”

Burgin writes in his explanation for the reason for the petition: “I believe the Climate Change Commission’s recommendations were based on extensive data driven research. I believe that if we do not comply with those recommendations, New Zealand will not achieve net zero carbon emissions, and therefore we need the decision to not accept all the recommendations to be reversed.”

Burgin says the Auckland floods are just the beginning if governments around the world fail to take urgent action on climate change.

The petition, which to date has received just 16 signatures, was launched on 20 December 2022 and closes on 31 March 2023.