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Hospitals Should Budget For Increased Costs

NEWS RELEASE 7 December 2007 (1 page)

Hospitals And Schools Should Budget For Increased Costs As A Result Of Emissions Trading.

The budget crisis being experienced by Capital and Coast District Health Board will only get worse with the introduction of the government's proposed emissions trading scheme which will add $7.6 million in increased electricity costs per annum to the health and community services sector at today's carbon prices ($30 tonne CO2), according to the Greenhouse Policy Coalition.

The Greenhouse Policy Coalition represents many companies in the energy intensive sector on climate change policy issues.

Catherine Beard, executive director of the Greenhouse Policy Coalition, says while her industrial members follow climate change policy closely, she was not sure the wider community was aware of the costs that would be coming their way very soon and which they would need to budget for.

"The health and Education sectors comprise 17,000 entities, they consume 3.2% of New Zealand's annual power demand and collectively they will pay an extra $16.3 million per annum for electricity alone, if the carbon price is $30 tonne CO2e and the indications are that it could be significantly higher than that."

Catherine Beard noted that these costs were for electricity use alone and did not factor in the increases that the health and education sectors would be facing due to increased costs for coal and gas. She said Hospitals in particular were large coal and gas consumers.

Catherine Beard says there are changes that could be made to the emissions trading scheme that would reduce the cost to the country - such as introducing a price safety valve to cap the price of carbon at an acceptable level.

"I would urge all hospitals and schools to calculate their fuel and electricity usage and work out what this will do to their budgets in two years time. If they are not happy with the result then they need to take their concerns to the Select Committee that will be hearing submissions on the Climate Change (Emissions Trading and Renewable Preference Bill) next year."

Health and Community Services Education Electricity consumption 545 GWh p.a. 622 GWh p.a. Fraction of total end consumer demand 1.5% 1.7% Number of consumers in this class 8,434 8,668 Increased electricity costs @ $30/t CO2e $7.6 million per annum $8.7 million per annum


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