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ETS move would allow extended support to exporters

Hon David Parker
Minister Responsible for Climate Change Issues

6 May 2008 Media Statement

ETS move would allow extended support for exporters

A proposed change to the emissions trading scheme framework would offer extended support to businesses under the provisions of the emissions trading scheme, as we transition to a low-carbon economy, Climate Change Minister David Parker said.

“The changes do not alter the fundamentals of the scheme, which are that it will include all sectors and all gases by 2013, and that participants face the full price of their emissions at the margin. This is key to influencing their behaviour, and thus reducing our greenhouse gas emissions.”

Prime Minister Helen Clark said today that the government would be proposing that free allocation of carbon units under the scheme would be extended for a further five years beyond 2013. This will mean the provision of 90 percent of free allocation for agriculture and trade-exposed industry continues until 2018, and would then be phased out until 2030.

The government is determined that the emissions trading scheme will be fair as well as effective, David Parker said.

“The proposal to provide longer term support for trade-exposed business and agriculture arose from members of the Climate Change Leadership Forum. Many members of this group, which includes business, environment and science representatives, are concerned that some New Zealand businesses will face unfair competition from products coming from countries where there is no price on greenhouse gas emissions, and the same emissions would just be transferred offshore.

“The parliamentary select committee hearing this bill is getting a similar message from many groups,” the Minister said. “As stated in the introductory note to the Bill, we would listen to feedback on the emissions trading scheme, and respond where appropriate.

“I have today written to the select committee asking for their consideration of this change, noting an emerging consensus around this issue from the leadership forum.

“This proposed change would allow industry more certainty around current investments and allows a more gentle transition to a lower carbon future.

“Along with the Prime Minister’s other announcement today, that the government is willing to delay the entry of the liquid transport fuel sector until 2011, this proposal is designed to avoid unnecessary disruption in the economy, while still providing an effective incentive to reduce emissions,” David Parker said.


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