Productive sector penalised today

New Zealand farms and businesses are the losers from today's grandstanding on the Kyoto Protocol, say Federated Farmers and Business NZ.

This afternoon the Prime Minister signs the 'instrument of ratification' that makes New Zealand officially part of the Kyoto Protocol to reduce climate change effects.

Countries that join the Protocol are legally required to restrict emissions of greenhouse gases, which will mainly be done by imposing taxes on energy use. New Zealand will be the only country in the southern hemisphere taking action under the Protocol.

"More than anything else, this will be a tax on the productive sector," Federated Farmers President Tom Lambie said. "Farmers are part of an integrated supply chain from pasture to plate and will have costs imposed all along that supply chain compromising our international competitiveness."

Business NZ Chief Executive Simon Carlaw said extra costs on New Zealand products would hamper export efforts. "We already face bigger transport costs than our international competitors because of our distance from our markets," Mr Carlaw said. "Energy taxes will add further to their cost, making them harder to sell."

Business NZ and Federated Farmers say New Zealand should be taking the lead from major trading partners the US and Australia, who have declined to join the Protocol and are instead working together on a more sensible approach aimed at tackling climate change. They say New Zealand needs to realise that the Government's ratification of the Kyoto Protocol does not answer all the unanswered questions nor resolve the unresolved issues related to climate change.

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