15 November 2009
Media Statement

More evidence of National folly in slavishly following Australia

The Australian Government's decision to exclude agriculture from its emissions trading scheme is further evidence of the folly of National's headlong rush to harmonise with Australia in this area, Labour's Climate Change spokesperson Charles Chauvel says.

”Australia's Federal Finance Minister Lindsay Tanner today announced that in a bid to secure Liberal Party support in the Senate for the Australian Carbon Pollution Reduction Scheme (CPRS), the Australian ETS, it had been decided to reverse the decision to include agriculture in the scheme from 2015.

‘’Agriculture is responsible for around 16 per cent of Australia's greenhouse gas emissions*. In New Zealand, it accounts for 49 per cent of all such emissions**.

“National, with the support of the Maori Party and Peter Dunne, is trying to amend New Zealand's Emissions Trading Scheme to harmonise it with Australia's proposed scheme. But as the Treasury warned in the Regulatory Impact Statement accompanying the amendment bill***, this causes some key risks, including:

- there is no analytical basis for the harmonisation proposal, especially given the different emissions profiles of the two countries;
- the Australian scheme has not yet been passed into law, and may yet change significantly (assuming it is passed at all), meaning we would be harmonising with a scheme whose details we just do not know; and
- business does not know what the medium to long-term costs of harmonisation will be.

"Today's decision shows the danger to New Zealand if the Government tries to rush its changes to the Emissions Trading Scheme through Parliament next week under urgency, as it apparently intends to do. It is proposing alignment with a scheme that

- does not yet exist,
- may yet change significantly (if it even passes), and
- will not include the biggest source of NZ emissions - agriculture - meaning it is bound to be designed very differently to what would be ideal for New Zealand.

"The Government needs to take a breather. Instead of rushing, it should wait to see what comes out of the Copenhagen Climate Conference in December. It should at least wait to see if the Australian scheme becomes law, and if so in what form, before deciding that New Zealand should harmonise with Australia."

*www.dpi.nsw.gov.au/aboutus/news/agriculture-today/july-2009/understanding-ets-jargon

**www.mfe.govt.nz/publications/climate/emissions-factsheets/factsheet-21.html
***Climate Change Response (Moderated Emissions Trading) Amendment Bill, explanatory note, p12

ENDS