Business leaders concerned over emissions trading
November 19, 2008
Business leaders not surprised by emissions trading review, but concerned about suspending the Act
Business leaders say it is to be expected that a new Government under an MMP system would want to review the emissions trading scheme passed by its predecessors.
The chair of the New Zealand Business Council for Sustainable Development, Nick Main, said today it was well signaled during the election that National would review the Emissions Trading System.
However it is hard to see that a review of the climate change science will provide any benefit. This review seems particularly redundant when the largest scientific co-operative programme of all time, the IPCC, has well established the science behind human induced climate change.
“A review of the science only makes sense if you intend withdrawing from the Kyoto Treaty obligations which no party in our Parliament supports,” Mr. Main says. “Our international reputation is not served by reviewing the climate change science when our major markets have already moved on from that debate.”
The Business Council is confident that any review of the ETS policy will confirm it remains the least cost way of meeting the country’s Kyoto commitments. The important issue is to properly reflect the cost of greenhouse gas emissions so that decisions are made reflecting those costs.
The Business Council first advocated for a cap and trade system as the preferred method of including the cost of emissions in 2002. As climate change is an international problem an international solution is needed. Kyoto is itself a cap and trade system and it is better for in-country systems to reflect the same approach.
An ETS already exists in the European Union and schemes are being developed in Australia, Japan and in the USA. China has also started designing a scheme.
Meanwhile, uncertainty about what “suspend the ETS legislation” means is putting investment decisions on hold. The position of forestry is particularly difficult as they are the only sector currently in the scheme. Industrial processes and stationary energy were not scheduled to enter until 2010 so suspension does not affect them right now. Suspension might mea΅ there is no market for theᾠcarbon credits forestry is now entitled to, that the issue of credits is suspended or that the liability for clear felling is also suspended.
The Business Council looks forward to co-operating with and contributing to the Select Committee. However, there is need for these processes to be carried out quickly to remove the uncertainty business now faces
“New Zealand, far from being a world leader on climate change, is a leader in emissions growth,” Mr. Main says. “The world debate has moved on. If we want to maintain our successful position in trade and tourism world-wide we have to move on from the science debate to taking action to reduce our carbon footprint.”