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News Worthy: Ramming the ETS through Parliament

News Worthy
29 August 2008 - No. 260

Ramming the emissions trading legislation through Parliament

The Emissions Trading Scheme is a major piece of economic and environmental legislation that will impact on the lives of every New Zealander for years, so it is too important to be rushed through Parliament just prior to an election.

Debate on the Bill started yesterday and there is every prospect that the Government (which now, with the support of minor parties, has sufficient numbers) will progress the legislation under urgency.

The Bill is more about politics and the upcoming election than it is about writing good, fair, lasting law that does not cost the country jobs and growth in the longer term. The Electoral Finance Act was also railroaded through Parliament by a slim majority for purely political reasons. That legislation has turned out to be a shambles.

National has made three major policy statements about its intended approach to reducing greenhouse gas emissions.

First, it has set an achievable emissions reduction target for New Zealand. That is a 50% reduction in New Zealand’s carbon-equivalent net emissions, as compared to 1990 levels, by 2050 - “50 by 50”.

It is worth noting how similar this target is to that of Australia’s. The Australian Government has a target of a 60% reduction in emissions by 2050. This is comparable with National’s “50 by 50” target because ours is relative to 1990 emissions levels whilst Australia’s is relative to emission levels in the year 2000.

Secondly, we need to ensure New Zealand works on the world stage to support international efforts to reduce global greenhouse gas emissions.

Thirdly we will pursue sound, practical environmental policies to achieve emission reduction. We want to reduce emissions in ways that result in the least cost to society and the economy.

Far from heading toward carbon neutrality, New Zealand’s emissions have gone up every year for at least the past eight years. Far from leading the world, New Zealand’s emissions growth has been among the worst in the developed world.

There are legitimate concerns with the process and content of the Government’s proposed ETS which include the following issues:

• Officials have admitted that the Government will profit by between $6 billion and $22 billion from the tendering of emissions permits.

• There’s been no clear analysis of exactly how much the scheme will reduce emissions.

• There’s been little transparency about the effects the ETS will have on already-struggling New Zealand households. Frightening reports have emerged about the likely economic effects of the scheme’s ‘lead the world’ approach to cutting emissions.

• The scheme has been subject to a large number of significant and last-minute changes which neither the Select Committee nor submitters have been given an opportunity to analyse.

A sound emissions trading programme should reflect the following six principles:

• The ETS must strike a balance between New Zealand’s environmental and economic interests. It should not attempt to make New Zealand a world leader on climate change.

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

• The ETS should be as closely aligned as possible to the planned Australian Carbon Pollution Reduction Scheme, with, where possible, common compliance regimes and tradability. We need to closely co-operate with Australia as we develop our respective schemes. Australia intends to release draft legislation in December and to introduce a bill to the House by March next year. It would be foolish to ignore this obvious opportunity to work with Australia, to share information and ideas and to work for mutual benefit as we develop our trading schemes.

• 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 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 end is nigh”

The phrase derives from a man who could often be seen walking up and down London’s Oxford Street wearing a sandwich board bearing the phrase.

No one apart from the Prime Minister and her closest advisers know when the general election will be.

Yesterday the Government Order Paper (which is the programme of Government legislation) had some 50 items of unresolved business, including as item 50 the Conservation (Protection of Trout as a Non-commercial Species) Amendment Bill. That particular Bill has been on the Order Paper since 12 November 1998.

Some of the Bills are significant. They deal with a myriad of issues relating to bio-fuels, public health, immigration, organised crime, legal services, financial advisers etc.

Clearly a lot of this legislation will not be advanced. It may well be abandoned because under the MMP regime the Bills do not have sufficient support from other parties.

The new Parliament will have to make a decision as to what Bills will be brought into it from the last Parliament. Those Bills will be reinstated at the stage they have reached in the previous Parliament.

Quote of the Week

“A man should keep his little brain attic stocked with all the furniture that he is likely to use, and the rest he can put away in the lumber room of his library, where he can get it if he wants it” – Sir Arthur Conan Doyle - British author of the Sherlock Holmes stories (1859-1930)

Dr Richard Worth

National Party MP


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