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Rushed ETS heading back to the drawing board

Charles Chauvel
Climate Change Spokesperson

7 December 2009 Media Statement
National’s rushed ETS heading back to the drawing board in 2010
Labour's climate change issues spokesperson Charles Chauvel is predicting that the Emissions Trading Law – passed late last month under urgency – will be back before Parliament early in the New Year, thanks to overseas developments that the Government did not foresee.

These include the likelihood of much faster progress on a global agreement than National planned for and the failure of the Australian ETS legislation.

"The ETS law passed last month assumed that the Copenhagen talks would end in failure. National thought that it would take many years for a global agreement on carbon emissions to bind our trading competitors,” Labour's climate change issues spokesperson Charles Chauvel said.

"As a result, the law passed last month puts in place a very slow phase out of taxpayer assistance to emitters before they begin to face a price on producing greenhouse gases.

“The phase-out is 1.3 per cent per year on an 'intensity' basis, replacing the previous law's 8 per cent per year phase-out on an absolute basis. Agriculture Minister David Carter said this meant that subsidies would continue for up to 90 years.

"The law also provides for five-yearly reviews for providing assistance, with no ability to phase-out subsidies for polluters more quickly.

"If, as is now predicted, the Copenhagen talks result in much quicker progress, it won't be possible to leave these provisions in place. They won't allow us to reach the much tougher pollution reduction targets New Zealand seems likely to be required to adopt, either at or shortly after Copenhagen. We will have to go back to something like the law as it was.”

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"There are other major parts of the law that are going to have to be brought back before Parliament in the near future, including the sections in the Act that align the New Zealand ETS with Australia,” Charles Chauvel said.

"The law passed by Parliament last month contains more than 50 references to Australia’s proposed Carbon Pollution Reduction Scheme in the body of the legislation and explanatory note.

“One of the major justifications for many changes the New Zealand law made is the need for trans-Tasman harmonisation. In the amendments the Government tabled during the passage of the legislation, 16 references to the Australian scheme appear.

"The Government insisted that Australia was going to pass its law by the end of the year. Last week, it became obvious that would not happen – indeed, Australia may now not have an ETS until late 2010.

"Nick Smith has already had to start rushing rule changes through the regulation-making process to try to patch up this mistake. But they won't be enough – the legislation itself will also require amendment.

“The Government has made a number of miscalculations on climate change policy based on bad advice. Ministers attending the Copenhagen talks need to listen carefully to what they hear there. If they don't, then when they are forced to bring the ETS back before Parliament next year, it will simply be a repeat of the rushed farce we saw last month," Charles Chauvel said.


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