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The Mapp Report: Emissions Trading

Mapp Report 20 June 2008


This week the Climate Change (Emissions Trading and Renewable Preference) Bill was reported back to Parliament from the Select Committee. National supports the idea of an emissions trading scheme as a market based approach to dealing with the challenge of climate change. We therefore had voted for the Bill when it was introduced to Parliament. But we also signalled then that we had concerns about how it would operate in practice. The submissions backed those concerns.

National’s six principles
Some weeks ago we set out six principles that the emissions trading scheme should meet:

The ETS must strike a balance between New Zealand’s environmental and economic interests.

The ETS should be fiscally neutral rather than providing billions of dollars in windfall gains to the government accounts at the expense of businesses and consumers.

The ETS should be as closely aligned as possible with the planned Australian ETS, with common compliance regimes and tradability.

The ETS should encourage the use of technologies that improve efficiency and reduce emissions intensity, rather than encourage an exodus of industries and their skilled staff to other countries.

The ETS needs to recognise the importance of small and medium enterprise to New Zealand and not discriminate against them in allocating emission permits.

The ETS should have the flexibility to respond to progress in international negotiations rather than setting a rigid schedule. This way, industry obligations can be kept in line with those of foreign competitors.

The government failed to give proper consideration to these commonsense principles. Therefore National will not continue to support the Bill, in its current form.

Building consensus
National is committed to getting this policy right. One of the fundamental lessons from other nations that have had to deal with challenging issues is to take the time and trouble to build a proper cross party and community consensus. That means actually taking on board the wide range of concerns and ensuring the final proposals properly deal with them. That inevitably takes time, and would not be bound to rigid election timetables.

Getting it right
The government has already delayed the introduction of transport into the emissions trading scheme till 2011. There is, therefore, plenty of time to get the legislation right. In particular, it could have ensured that a New Zealand ETS lined up with the proposed Australian ETS.

The Closer Economic Relationship with Australia (CER) should mean that there is a common approach to the issue. The New Zealand legislation and Australian legislation should essentially mirror each other to enable a trans-Tasman carbon market. The government, in its rush to brand itself with the green label, has ignored this obvious opportunity to get it right.

Looking forward
No matter what happens this year with the ETS Bill, the whole issue will have to be revisited next year. With Australia, the United States and Canada all proposing an ETS, it will make sense for each of them to line up with others as much as possible. Rushing in now will not build an ETS that will be sustainable.


Playcentre Federation visit
Last Friday I visited the North Shore Playcentre Federation office. Playcentre is based on parents as teachers, and is essentially run by volunteers. Around 10 to 15% of children go to playcentre.

New Zealand’s social development has largely rested on the voluntary efforts of people within the community. They need encouragement, not to be told that their efforts are not valued.

Jewish community concerns
On Monday I spoke to members of the New Zealand Jewish community at Meadowbank.

There were three key issues:

• How a National government will support Israel, and especially its security, from the scourge of terrorism. In particular that means supporting Israel in an appropriate way in the United Nations.

• A more flexible approach to immigration; a particular concern of the Jewish community in South Africa

• Proper support of independent education. National’s goal of boosting public support to around 50% of the basic cost of public schools.

New Zealand has traditionally been regarded as a good friend of Israel. In recent years, our reputation has slipped. It is time for it to be restored.


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