Media Statement Tuesday 2 February 2004

Proposed Negotiated Greenhouse Agreements acceptable but there must be limits

The Environmental Defence Society says that the announcement by the Minister of Energy today that the government intends to enter into greenhouse negotiations with Carter Holt Harvey and New Zealand Aluminium Smelters Limited is "to be expected."

EDS Climate Programme Director Garry Law says that both companies are clear contenders for a Negotiated Greenhouse Agreement.

"Under such an agreement, the companies would undertake to move towards worlds best practice in managing their emissions in return for an exemption from all or part of the carbon tax that will take effect from 2007," said Mr Law.

"The Aluminium company in particular has been an early mover in this area and has made significant improvements in its emissions management over the past decade.

"While there's nothing unexpected about these two applicants, the government is going to have to be wary about how many companies are eligible for NGAs. We cannot afford to get to the position where no big emitters are paying the carbon tax.

"Further, we see an urgent need for the government to develop the proposed carbon tax further to provide certainty to business. There is a strong case for using the revenue from the carbon charge to offset existing taxes. It should reduce existing company taxes and be part of an overall move towards taxing "bads" such as pollution and reducing the tax burden commensurately on "goods" such as profits.

"The overall design and impact of the carbon tax should be known now so that companies can assess whether they need or wish to become involved in the complicated and expensive process of entering into NGAs with the government.

We call on the Ministers of Energy and Finance to put some proper resource into fleshing out the carbon tax in the context of an overall move towards green taxes" Mr Law concluded.

ENDS