Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

John Banks obstacle to saving New Zealand carbon market

Media release – op-ed

2 October, 2012

John Banks obstacle to saving New Zealand carbon market

By Adelia Hallett, Editor, Carbon News

The Government may be weakening in its opposition to restricting the number of international carbon units allowed into New Zealand.

But it faces a problem: John Banks.

CarbonNews understands that some members of the Government are becoming concerned about the ramifications of a politically motivated decision not to include some sort of restriction on international units in the latest amendments to the Emissions Trading Scheme.

Earlier this year, with domestic carbon prices collapsing in the face of an international glut of cheap units, the Government supported bringing in some sort of limitation on the use of international credits to meet carbon liabilities under the ETS.

In a consultation document released in April, the Government said that it proposed “introducing a mechanism" that would let the Minister for Climate Change restrict the proportion of international credits used.

This was followed with a statement by the minister himself, Tim Groser, who told the Iwi Leadership Forum that “the Government also proposes to enable in legislation the introduction of a mechanism that would place a restriction on the proportion of international units a participant can surrender to meet their ETS obligation”.

Groser said that under current rules, there was a “serious danger of New Zealand essentially exporting capital for no good reason, resulting in a loss of economic welfare”.

But the provision is missing from the Government’s final proposal to amend the scheme, now before Parliament.

The Government says that this is to make sure that New Zealand emitters have access to carbon at the international market price, but this argument ignores the fact that other countries with schemes in place – including the European Union and Australia – have included such restrictions.

What’s worse, these restrictions mean that New Zealand will be the only destination for these units. As forestry investment chief Roger Dickie says, with Russia about to release 300 million EURs, the chances of prices holding up in New Zealand’s 16 million tonne annual market are not good.

In a display of strategic lobbying not seen since the Labour Government proposed keeping all forestry Kyoto credits for itself, the forestry sector has launched a multi-pronged attack to get the Government to change its mind. As Craigmore Sustainables founder Forbes Elworthy - the son of former Federated Farmers chief the late Sir Peter Elworthy - put it, they're fighting for their lives.

It has a good argument; the planting of 20,000 ha a year of exotic forests is an essential part of the Government’s plan to reduce greenhouse gas emissions, and with carbon prices touching as low at the $2 range in recent week (down from more than $20 last year) plans for future planting are non-existent.

While the weight of opinion among members of the Finance and Expenditure Select Committee, which is hearing submissions on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, apparently remains implacably opposed to restrictions, sources suggest that others in the Government are starting to develop different views.

And that’s where Banks comes in. As part of the confidence-and-supply agreement with Banks’ Act Party that got the National Party back into government last year, it agreed to support “legislation to reduce the impact of the Emissions Trading Scheme on New Zealanders, consistent with the recommendations of the independent review, including by deferring the introduction of agriculture into the ETS in 2015 and holding down the increase in energy prices”.

Banks claimed the omission from the bill of provisions to restrict international units as a win for Act, saying the party had negotiated provisions which would “preserve the unrestricted importation of overseas carbon units”.

The issue that the Government now faces is now one of politics versus sound economic and environmental policy. Allowing domestic carbon prices to be destroyed by cheap foreign units that no-one else wants will cost the country money in 20 years’ time, when we start to feel the lack of today’s planting. It is already costing us our international reputation in this space, as Carbon Match’s Lizzie Chambers points out.

Act’s single vote in Parliament is critical to the balance of power, but with the Prime Minister’s dogged loyalty to Banks over the Kim Dotcom affair, perhaps National does have the political capital in the bank to negotiate a change over international carbon credits.

• Adelia Hallett is Editor of Carbon News, New Zealand’s specialist information service on the emission trading markets.


ENDS


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Mining: OceanaGold Announces Receipt Of WKP Mining Permit

MELBOURNE, Australia, Aug. 6, 2020 /CNW/ - OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the 'Company') is pleased to announce it has received the mining permit for Wharekirauponga ('WKP') on the North Island of New Zealand. ... More>>

ALSO:

Economy: COVID-19 Lockdown Has Widespread Effects On Labour Market

In the June 2020 quarter, the seasonally adjusted unemployment rate fell to 4.0 percent, down from 4.2 percent last quarter, while underutilisation rose, Stats NZ said today. More>>

ALSO:

NZ Post: New Research By NZ Post Shows Online Shopping Grew 105% In Alert Level 3

New research by NZ Post into how the COVID-19 response has impacted the way Kiwis shop online, shows online shopping increased 105%* when the country moved into Alert Level 3, and may have changed the way Kiwis shop permanently. Online spend peaked ... More>>

ALSO:

Banking: Westpac NZ Lowers Merchant Fees For Small Businesses

Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers. On 1 September, most ... More>>

REINZ: Million Dollar Plus Property Sales Increase 11.7% Nationally

The number of properties sold around the country for one million dollars or more during the first half (H1) of 2020 increased by 11.7% compared to H1 2019, with 5,426 million-dollar plus properties sold (up from 4,858 in H1 2019) according to the Real ... More>>

Waste: Government To Regulate Plastic Packaging, Tyres, E-Waste

The Government is stepping up action to deal with environmentally harmful products – including plastic packaging, tyres and e-waste – before they become waste. As part of the wider plan to reduce the amount of rubbish ending up in landfills, ... More>>

ALSO:


Antarctica NZ: Ice-Olation

Antarctica New Zealand is gearing up for a much reduced season on the ice this year and a very different deployment to normal! Before they head to one of the remotest places on the planet, all personnel flying south with the New Zealand programme will ... More>>

ALSO:

QV Valuations: July House Price Index Illustrates Market Resilience

According to the July 2020 QV House Price Index (HPI) results out today , property values recorded a marginal increase, up 0.2% over the month. This is somewhat of a turnaround from June, after the national index edged 0.2% lower. More>>

ALSO:

Property: Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index. Trade Me Property spokesperson Aaron Clancy said ... More>>

Seismology: The Quiet Earth

As many daily activities came to a halt during lockdown, the Earth itself became quiet, probably quieter than it has been since humans developed the technology to listen in. Seismologists have analysed datasets from more than 300 international ... More>>

RNZ: James Shaw Says Kiwibank, Not Ministers Should Decide On Investors

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one. More>>

ALSO:

FMA: Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments

Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually ... More>>

FIRST Union: Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off

(FIRST Union comments on The Warehouse consultation and proposed restructure) 'Unfortunately the Warehouse have done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs ... More>>

ALSO: