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Emissions trading scheme has to be fair, effective

Hon David Parker
Minister Responsible for Climate Change Issues

2 May 2008 Media Statement

Emissions trading scheme has to be fair and effective

The overall message from economic reports released this week on the emissions trading scheme is that it must be both fair and effective, Climate Change Minister David Parker says.

“A number of reports have been released in response to the emissions trading scheme this week. All of them support an emissions trading scheme, though some of them take issue with the detail of the design.

“The message from the Climate Change Leadership Forum chaired by Stephen Tindall is that the scheme is properly designed and will work. The forum highlights the need to consider again the rate at which free allocation of emission rights is phased out for exporters facing competition from countries which have not yet introduced emission pricing.

“The Infometrics review released by the government finds that meeting our Kyoto commitments will have a modest economic impact, and that an emissions trading scheme is an effective way of managing that cost in the long term.

“A Cawthron Institute-led report on the environmental impacts of the ETS says the measures taken to reduce emissions can generate positive co-benefits for air and water quality, and land use. It confirms the government’s view that at the same time we need safeguards in place to protect biodiversity, and land and water resources.”

“The report from NZIER misses the point of an emissions trading scheme. It recommends that taxpayers pay the cost of our Kyoto commitments rather than those that create the emissions. This would create no incentive for businesses to reduce their emissions, and is unfair on the taxpayer. It would fail to achieve the environmental objective of reducing emissions.

“The Sustainability Council report recommendation is the opposite of the NZIER report,” David Parker said. “It says the cost of the ETS should bite big emitters harder and sooner. But it is important that the transition to emission pricing under the ETS is fair. Imposing too high a cost on all sectors at the outset would not be fair and would not bring about the best global control in total emissions.

“All of these reports are going to the select committee for consideration. The Labour-led government is paying close attention to the concerns expressed by stakeholders, and we are open to making changes to the emissions trading framework to accommodate some of these, if the select committee recommends it.”


ENDS

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