When John Key announced our targets on joining the non-binding Copenhagen Accord he was careful to state conditions that would ensure we are not forced to continue wearing our ETS hair shirt if the rest of the world doesn't abandon lycra.

Events in the US and Australia are making it more likely that we'll be back into the lycra. Australia's ETS is looking increasingly unlikely, according to The Australian's Paul Kelly, as interest in cap and trade vanishes in the US.

Our conditions were:

• a global agreement that sets the world on a pathway to limit global temperature rises of not more than 2°C
• comparable efforts by other countries
• actions by advanced and major emitting developing countries fully commensurate with their respective capabilities.
• effective rules governing land use, land use change and forestry (LULUCF)
• full recourse to a broad and efficient international carbon market .

Plenty of room there to justify our Government deciding not to pay the carbon credit kings (like Russion oligarchs with Siberian forests) for not meeting targets after 2012.

Unless our ETS is used as a naked tax, if the government is off the hook they should dump or suspend the ETS for so long as there is no international obligation. So, for example, forest owners worried about not being able to change their land use, or being forced to replant uneconomic ground to avoid (currently) $25k per ha carbon cost, should hold off till 2013. Then do it in a hurry.

There's a good chance of suspension. At the least, if the world is dallying reaching a binding agreement, the government should suspend the ETS.  A rush to deforest then may simply accelerate conversion that would occur anyway but at great cost to our government (and land users). For such land it is in NZ's interests to change while the world is dithering. It will not be a net adverse cost to the environment unless it is land that would have remained permanent forest under the regime eventually adopted.

(Thanks Dan  McCaffery for the Paul Kelly link)