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Many lobbies had a finger in emissions trading pie

Oct 13th, 2008 | By | Category: Featured Article, Features

A HOST of lobby groups has pressured the Government about the emissions trading scheme.

KRISTINA KEOGH and MELISSA KINEALY find out who they are and what they wanted from the new legislation…or whether they wanted it at all.

(PHOTO: Jason South)

Sustainability Council of NZ

The council’s April, 2008, report talks of an imbalance between how much the individual will pay compared to large polluting companies.

The report by Victoria University economics and finance lecturer Dr Geoff Bertram and council executive director Simon Terry suggests that in the first five years of the emissions trading scheme, large companies will not pay much to cover the carbon credit cost.

The council, an independent body whose purpose is to assist the realisation of a sustainable New Zealand, feels there is an imbalance between the big offenders of pollution and the everyday person, since the scheme will increase the public’s power bills, road charges and food costs.

Its report says a key benefit from the ETS will be an incentive for the agriculture sector, especially dairy farmers, to reduce emissions. The ETS will deliver a reduction in gross emissions of less than a 2% over the next five years. The lack of early reductions will mean a higher level of emissions later.

If all emissions were priced the same at all times, costs would be shared fairly and the country could develop a sustainable strategy for addressing its global environmental responsibilities.

Council members include former squash star Dame Susan Devoy, actor Sam Neill and celebrity chef Annabel Langbein.

New Zealand Business

The Government has not taken on any of the issues that were submitted by them during the consultation process, according to NZ Business.

“Even submitters who favoured an emissions trading scheme and wanted to contribute sensible improvements were ignored,” says chief executive Phil O’Reilly.

When the Green party asked for public opinion on where they should stand, NZB told them New Zealand needed an emissions trade scheme, but not the scheme in its current form.

“There would not be much environmental gain for all the economic pain,” says Mr O’Reilly, whose organisation represents the interests of the country’s business and employment sectors.

NZ Business thinks New Zealanders will eventually have to pay more for petrol and electricity than the Government is signalling.

“When the Government first unveiled its scheme, it was based on carbon being priced at $15 a tonne. They said this would increase petrol prices by 4c a litre, but since then the price of carbon has hit $50 a tonne and is still rising.

“If the Government’s proposed scheme were in place now, petrol would have increased by 13c a litre and electricity would have increased by about 20%.”

One key issue for NZB is what the ETS will cost in the long run.

NZB wanted the bill sent back to the select committee for further consideration because it was rushed and needed further consideration, either by this or the next government, and should be better aligned with Australia’s proposed scheme: “A graphic example of poor law-making.”

Federated Farmers

Federated Farmers thinks the ETS will put New Zealand’s economy in danger.

In the long run, it may mean New Zealanders having to import goods that were previously exported, says the organisation, which represents farmers and rural families around the country.

This could be the result of increased costs of owning and running farms in line with the scheme.

“New Zealand farmers are internationally recognised as world leaders,” says president Don Nicholson. “It would be a disaster for this to be seriously threatened.”

If there is no money to buy or sell carbon credits, the scheme will not have a chance to achieve what it has been set up to do, he says.

“It jeopardises the New Zealand economy and it has little if any chance of achieving the global environmental outcomes sought.”

Like NZB, the group also thinks the law was rushed: “We should not rush this decision. We should take the time to use our collective intelligence to get it right.”

The Greenhouse Policy Coalition

The ETS is the most complex legislation ever attempted in New Zealand and a huge number of problems will emerge from it, according to executive director Catherine Beard.

“The Greenhouse Policy Coalition thinks that the ETS has been rushed through because there [was] a want to pass it under this government.”

“This is a scheme that needs to be fixed and fixed soon – before new investment goes to other countries,” she says on behalf of her organisation, which represents large businesses like Aluminium Smelters Ltd, Steel Limited, Fonterra, Coal Association, Carter Holt Harvey, Business New Zealand, Solid Energy and Holcim Ltd.

According to a report by the Institute of Economic Research – which appears to have been funded by coalition members – thousands of jobs will be lost throughout the country and day to day costs will increase.

The coalition says the ETS will put a tax on petrol which would put strain on New Zealand drivers. In a 2005 submission, it said a lot of New Zealand’s carbon emissions do not come from electricity.

Greenpeace

The ETS is only a small first step and needs to be backed up by other measures to ensure emissions are actually reduced, says the environmental group.

Greenpeace does not think the ETS will significantly reduce emissions. It wants a more long term view about how this is going to reduce emissions.

It also believes the ETS is not fair for the tax-payer. The scheme will give free credits to the industrial and agriculture sector, but so far there has been no indication the public will get the same.

Greenpeace senior climate campaigner Simon Boxer says the organisation is happy about the one billion dollar Government subsidy for energy efficiency, which means that more money will be spent on insulation in homes.

The Greenpeace E-Magazine criticised the scheme on the following points:

• The absence of a limit on the number of permits for importing goods.
• The allocation of permits. The proposal to give away credits, rather than sell them undermines the capacity of the ETS to increase efficiency and reduce emissions.
• The timing of permit allocation. For an ETS to work effectively, all sectors must be included; without that, permit prices might increase. The agriculture sector does not have to participate until 2013.

Ngai Tahu

The South Island iwi opposes the ETS because the forests it owns will cost it more in the future, apparently more than $100 million, says chairman (kaiwhakahaere) Mark Solomon.

The iwi will have to replant trees as they are being cut down to avoid losing money on having to purchase and use carbon credits. It also fears the scheme will make converting forest land to uses like dairying less economic, potentially lowering the land value.

Ngai Tahu is seeking compensation for what it says will be a loss in the value of the forests it received in its Treaty settlement. The iwi settled its original claim more than a decade ago, but lodged a new claim – in the final hours before Treaty claims closed – to cover the effects of the ETS.

Kyoto Forestry Association

The association (KFA), which represents forest owners who have planted more than 200,000ha in New Zealand since 1989, congratulated Climate Change Minister David Parker, Forestry Minister Jim Anderton and the Labour/Progressive Government after the ETS passed into law.

Its stance is different from that of other lobby groups.

It wants to work with officials and all political parties to ensure future amendments to the ETS do not undermine the value of the carbon credits it has delivered to post-1989 forest owners.

The group does want some improvements.

• Land owners should be able to elect to join the scheme on an average-carbon basis.
• Annual carbon measuring costs should be minimised.
• There should be greater incentive to replant on new land rather than replant an existing forest on maturity.

KFA spokesperson Roger Dickie says his organisation believes all gases and all sectors, particularly agriculture, should be brought into the ETS sooner than planned.

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