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As We See It Headlines
Emissions trading scheme should be delayed
The Emissions Trading Scheme must be delayed
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As We See It
The Emissions Trading Scheme must be delayed
Tuesday, 13 April 2010
By Bruce Goldsworthy
The introduction of New Zealand’s Emissions Trading Scheme (ETS), which is legislated and planned to take effect from July 1st, must be delayed.
The New Zealand economy is in no state to lead the world with an emissions trading scheme affecting the entire New Zealand economy.
It was disingenuous of Climate Change Issues Minister Nick Smith to say on Radio New Zealand [April 8] that the EU has an ETS in place - theirs covers only 4 per cent of EU output; ours covers 100 per cent of output.
His main reason for proceeding with the ETS now was that not to would lead to perverse outcomes in the forestry sector. However, forestry could be incentivised to keep planting under a low level carbon tax, which could be used to give them a credit though not part of a scheme where carbon credits are traded with big emitters of gases.
In the current circumstances we recommend the Government legislate to align the entry of our industry sectors into the ETS with those of our trading partners once they have their schemes in place.
The ETS will also hit hard the competitiveness of many of our leading industries including all our major food producing exporters. They will face cost increases that their competitors overseas and in the New Zealand market do not face.
It will cost jobs.
New Zealand is the only country in the world to be introducing an ETS that covers all industry sectors and all so-called greenhouse gases.
Other reasons New Zealand’s ETS must be delayed are:
• A new energy tax is effectively a tax on exports.
• When deciding on an ETS it was assumed that global carbon markets would rapidly develop. The opposite has happened. Carbon markets have all but disappeared.
• Globally there has been a dramatic shift in public attitudes regarding climate change, towards a more skeptical view.
• Australia won’t enact an ETS this year which means Australia has an immediate advantage in competing for international investment.
• Since our ETS is also intertwined with Australia’s planned law and because theirs is not going ahead, our bureaucracy will struggle to be ready for the July 1st start.
• It’s difficult to reconcile our ‘world-beating’ legislation with National’s manifesto promise to take a middle-of-the-road stance on climate change.
If the ETS proceeds on July 1st we fail to see how the Government can expect the ongoing tacit support of the business community.
We will soon be able to report on our members’ views, which are being surveyed as I write.
• Bruce Goldsworthy is the manager of manufacturing and advocacy at the Employers and Manufacturers Association (Northern) Inc.
