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Re-think needed of NZ ETS following Bali Roadmap

Re-think needed of NZ ETS following Bali Roadmap

“The pace and scope of international negotiations signalled in the just released Bali Roadmap and the design and timing of the proposed New Zealand Emissions Trading Scheme are miles apart,” said Ralph Matthes, Executive Director of the Major Electricity Users’ Group (MEUG).

“The New Zealand Parliament is considering a Bill that will by 2013 cover all greenhouse gases and will fully devolve all obligations for greenhouse emissions from the government to business. This will flow through as higher costs for all goods and services purchased by consumers. None of the other 191 countries at the Bali meeting are considering as wide spread and rapid implementation timetable to expose their economies to greenhouse gas prices.

“Part 2 of the Emissions Trading Bill implements the last minute policy agreed by Ministers banning any new thermal generation for the next 10 years with some small exceptions that can be approved through as yet to be specified criteria. That daft idea isn’t being considered by any other country in the world either.

“The Bali Action Plan (or “Bali Roadmap” as it is often called) just published by the United Nations Framework Convention on Climate Change (UNFCCC) is a 5 page document that has a single action point. That action is for all countries in the world to work through a new Ad Hoc Working group on Long-term Cooperative Action that will report by the end of 2009.

“New Zealand should be taking a cautious approach and working very closely with Australia in particular to align any arrangements we might put in place before the report of the Ad Hoc Working group on Long-term Cooperative Action is published.

“For example with the lessons learnt from the Kyoto Protocol Agreement that expires in 2013, it is very unlikely an international consensus will be achieved to adopt a similar cap and trade arrangement from 2013. The trouble with cap and trade models is they slow GDP growth compared to alternatives such as emissions intensity type arrangements. The New Zealand Emissions Trading Scheme is designed to mirror the Kyoto Protocol cap and trade model.

“To continue with the timing and design of the New Zealand Emissions Trading Scheme as if the Bali Roadmap and the possibility of a totally different type and timing of international agreement being reached in late 2009 is simply a head-in-the-sand approach,”concluded Mr Matthes.


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