Emissions trading bill "gentle and generous"
Proposed changes emissions trading bill "gentle and generous"
Recommended changes to the emissions trading bill as reported back will protect New Zealand industry from any unfair offshore competition and probably push assistance to major emitters to the limit of public acceptance.
The New Zealand Business Council for Sustainable Development says the select committee's recommended changes provide more certainty and support for forestry, agriculture, major electricity users, and new emitting businesses which want to start up here.
The phase out provisions are gentle and generous. It regrettably does not recommend dropping a proposed ban on new thermal base load power generation which should not be necessary once there is a price on emissions.
The Business Council, whose 73 member companies' annual sales of $44 billion equate to about 34% of gross domestic product – says the committee should trust the emissions trading scheme to put a price on heavier emitting fuels, like coal and gas, and redirect investment into renewables.
Contact Energy has already switched more than $2 billion into a renewables energy development programme, based partly on the emissions trading scheme and its carbon price being introduced, and this is example enough of what would occur without a thermal ban, Business Council Chief Executive Peter Neilson says.
The Business Council had not supported introducing a "safety valve" cap on the emissions price when traded. The committee has come out against such a cap, saying it will be hard to administer, have a negative impact on the whole economy, and make the scheme hard to link internationally.
The bill also provides for reviews of the scheme to make sure the country's competitiveness is not damaged.
"The assistance to emitters and the extension to times before some will full enter the scheme, and to the phase out of taxpayer subsidies for heavy emitters has probably reached the outer limit of public support," Mr Neilson says.
"A majority of New Zealanders support protecting our businesses from unfair overseas competition from those not facing a price of carbon. But they want that assistance to stop when competitors are paying, and most want assistance phased out by 2025. Now assistance goes until 2030 under the bill as reported back. Taxpayer support for heavy emitters is probably at its limit. It's definitely at the limit for the Green Party, according to the committee report.
"Phasing out protection for emitters is necessary to move the cost from taxpayers to emitters.
"We'd like to see the bill go through and business given certainty over carbon pricing as soon as possible. This will start a rush of investment decision making, like the $1 billion by New Zealand Steel's Australian owner, Bluescope, on hold till the ETS details are settled.
"Getting emissions down sooner rather than later will also trigger massive investment in other low-carbon ventures. These too will be worth billions and create thousands of new jobs," Mr Neilson said.
"They will also put New Zealand in a stronger trading position compared with countries going slower. All our major trading partners have now signaled they will introduce cap and trade schemes – and it's better we continue produce lower-carbon exports faster than them, while making sure our businesses are given fair protection.
"There will be much to debate in the new few days – but we're best to get on, get emissions down, stimulate new cleaner industries and get ahead in the world.