Trans Tasman's Political Pulse - 08 August 2017

08 August, 2017

Businesses want clear rules on emissions.

Climate Change: Finding Certainty
In An Uncertain World

INSIGHTS ABOUT THE NEWS - Signs are growing of a consensus around the direction of climate change policy which will have a fundamental impact on energy and environmental policy, as well as the wider economy.

As reported in the NZ Energy & Environment Business Alert, while the environmental movement and businesses are almost united in calling for long-term certainty, the only ones who can provide it – politicians and voters – are those most likely to disrupt it.

The Govt’s release of its review of the Emissions Trading Scheme shows a National-led Govt is preparing to make the ETS more fit for purpose, though Ministers still fear using price signals to enforce change (and pain) to farmers and other sectors.

The unwritten narrative of the material behind the review is a growing realisation among Ministers the Paris Agreement targets are not going to be easy to meet.

Alongside this is the growing acceptance the default policy of relying on buying other countries’ emissions reductions will not cut it for fiscal and political reasons, even if the mechanism exists.

The Parliamentary Commissioner for the Environment, Dr Jan Wright, is also pushing to legislate for the Paris Agreement targets and a Climate Change Commission to set a carbon budget. National is the only party saying the policy settings aren’t right at the moment.

Ministers are wary of allowing anyone else’s hands on a lever which will reach through every part of the economy. While Wright called for an advisory-only body, it would be hard to ignore.

One unknown is the outcome of the election. NZ First has tried to wipe out the memory of it voting in support of the original ETS legislation and the party now wants to scrap it. The Greens will no doubt want stronger climate change policy, but their position on the ETS is unclear.

It is all pretty much in the hands of the voters on whether there will be a change in the path National is leading the country slowly down.

In the meantime, action on cutting emissions is being fudged because of fears it could put the brakes on the economy. People may yelp when prices reach the point they curb polluters, but until the prices do that, little will be achieved.

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