Emissions Trading Scheme: Jobs & Investment Risked
Jobs And Investment At Risk With Proposed Emissions Trading Scheme
A new survey of business across a wide range of sectors shows the proposed emissions trading scheme will create significant new costs; affecting the profitability of firms, causing job losses and reducing new investment in key sectors.
The relatively small survey of 32 firms, which includes some meat companies, pulp and paper mills, iron, steel, shipping, cement, dairy, mining and supermarkets shows that a carbon price of $30/tonne will cost those firms $241 million in increased direct energy costs, result in deferred investment of $1.5 billion, put at risk over 2000 existing jobs and 425 new jobs had planned investment gone ahead.
The survey was carried out by Greenhouse Policy Coalition and the Major Electricity Users Group, which are industry associations representing many of New Zealand’s largest employers and energy users.
“A carbon price of $30/tonne CO2 was chosen for the survey because that is what it would currently cost firms at today’s carbon market prices and the survey presumed no free allocation of allowances. Of the firms that responded to the survey only 14 of the 32 companies would be allocated partial protection via free allowances under the government’s current proposals.”
Ralph Matthes, executive director of the Major Electricity Users Group says the survey results are conservative (only measuring direct increased costs) and are just the tip of the iceberg. “So far we have only had 32 responses to our survey, but we expect these numbers to grow as more firms return their survey forms to be analysed. If you extrapolate these results it is clear the impact on the economy of the proposed emissions trading scheme will be significant.”
Catherine Beard, executive director of the Greenhouse Policy Coalition says the government should re-evaluate its proposal to introduce the most ambitious emissions trading scheme in the world. “The cost of exposing New Zealand businesses to an emerging, volatile and politically driven price of carbon, with little in the way of protection for local industry, could be an experiment that is hard to undo. Most of the wealth generated in New Zealand is from agriculture, primary industries and manufacturing and these are the industries that will be hit hardest by the current proposals.”
Catherine Beard said the scheme would be improved if recommendations in the recently released Castalia report, such as intensity based targets and price safety valves were adopted.