30 October 2008 Media Statement

Economies continue to grow with emissions trading schemes

A report released today by the Australian government has confirmed that a country's economy will continue to grow with an emissions trading scheme, and it's cheaper to act sooner rather than later, Climate Change Minister David Parker said.

"Analysis done for the New Zealand government came to the same conclusion," David Parker said. "Our economy will continue to grow while we reduce our greenhouse gas emissions, but the growth rate will be slightly less than it would have been – around 0.1 percent.

"That means for example if the economy was set to grow by ten percent over the next five years, with an ETS it will grow 9.9 percent over that period instead.

"However, without the emissions trading scheme the costs of meeting our international climate change obligations would be higher, quite apart from the environmental consequences that might occur if the world does not get climate change under control."

David Parker said the Australian report's conclusion that it was cheaper to act sooner rather than later confirmed several other studies.

"It is better to put the right economic signals into the economy as soon as possible rather than try to play catch-up later on."

Labour was committed to action on climate change and had already passed into law an emissions trading scheme which would reduce New Zealand's greenhouse gas emissions and reduce the cost to taxpayers of meeting Kyoto obligations, Mr Parker said.

"Labour has been clear about its commitment to climate change action, but National MPs are giving different messages to different audiences about what it would do about climate change.

"This report today points out once again that it would be folly to delay when Australia, UK, Europe, South Korea and others are already taking action.

"And it shows that taking action is entirely affordable, contrary to the exaggerated rhetoric we continue to hear from some doomsayers."

Read the Australian report here: www.treasury.gov.au/lowpollutionfuture/

ENDS

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