Nick Smith MP
National Party Climate Change Spokesman

16 June 2008

Flawed ETS needs more work

New Zealand’s environment and economy will be compromised if the Government’s emissions trading scheme [ETS] is rushed through Parliament in its present form, says National’s Climate Change spokesman, Nick Smith.

Dr Smith is commenting on today’s release of the Finance and Expenditure Select Committee’s report on the Climate Change [Emissions Trading and Renewable Preference] Bill.

“The reckless and rushed select committee process has resulted in a botched piece of legislation that needs substantial amendment to achieve the goal of reducing emissions at the least cost.

“This scheme is a giant cash cow from which the Government will profit by more than $23 billion from the extra costs like the 7 cents a litre on fuel and 18% on electricity. National wants the scheme reconfigured so government doesn’t profit at the expense of families and businesses.”

Dr Smith says the flawed bill is riddled with perverse incentives. Major industries are going to be pushed offshore, with jobs and the emissions simply being exported to other countries.

“It’s going to trigger another round of deforestation of young trees because of the way liabilities fall on forest owners. It’s going to encourage the use of foreign fishers at the expense of New Zealand’s own fleet, and it’ll do serious damage to manufacturing industries like air-conditioning and refrigeration.

“The bill is silent on the key mechanisms needed to make an ETS work. For example, no one knows who will take responsibility for agriculture: the processor or the farmer.

“We do not know the size of the industries that will receive emissions allocations or whether new industries will be eligible. On major issues like offsetting forestry plantings, the select committee has simply kicked for touch.

Dr Smith says the Government seems far more interested in attracting international accolades for passing a grandiose bill than putting a sensible and balanced ETS in place that will work long-term for New Zealand.

“This is yet another example of Labour’s history of railroading partisan legislation through Parliament on a narrow majority, just like the Electoral Finance Act, which has been a total disaster.

“There is ample time to get this bill right with the Government’s own deferral of the legislation for two years. We need to slow the legislative process down in order to take heed of the imminent announcement of Australia’s ETS, and resolve the many issues that the select committee has put on hold.

“Only then will we be able to come up with a bill that will actually work.”

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ETS_National_Minority_Report.doc

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