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Competitiveness Risks Demand Caution On Kyoto

Climate Change Pan Industry Group

“Risks that business competitiveness and employment of New Zealanders will be undermined by policies following ratification of the Kyoto Protocol, mean the Government should slow the process”, Chris Baker, Spokesman for the Climate Change Pan Industry Group said in a statement today. He made these comments following the release of the group’s report titled, “The Kyoto Protocol: Issues for New Zealand’s participation”.

“The report looks the impact of Kyoto policies on specific industries. As many of our competitors are in countries that will not be bound to reduce their emissions for the next decade at least, the impact on the competitiveness of New Zealand industries from Kyoto policies could be severe with real employment losses.

“Equally unacceptable is the possibility of reduced returns on capital and wages for certain industries. This is clearly stated as a likely outcome by the Government’s own National Interest Analysis”. (NIA see page 34)

Mr Baker said the report, which was written by the New Zealand Institute for Economic Research, complemented the Government’s own National Interest Analysis which did not look at the impact on individual sectors of the economy in any detail. “Our report provides some of the flesh, albeit in the absence of clear policies, which was lacking in the NIA.”

“The government should takes its time and defer ratification until:

1. It has determined the policies that would be adopted following ratification and thoroughly assessed their implications for the economy and employment; and

2. It is clear that Kyoto is well on its way to being a binding global agreement that substantially includes our competitors and trading partners.

“There is no advantage to New Zealand in rushing this process. The government has yet to produce its preferred policies. These will need to be analysed very thoroughly and assessed in light of the development of policies in Australia in particular.

“We urge the Government to work with industry, the unions and others with an interest in a growing, competitive economy, on a timetable and strategy that recognises New Zealand’s situation and does not pander to international pressure”, Mr Baker said.

Ends

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