Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Costs of emissions cuts most likely over stated

July 27 2009
Media Release

Costs of emissions cuts most likely over stated

A carbon price of $100 to $200 per tonne is being assumed to generate estimates that New Zealand households will face a $3000-a-year bill for cutting emissions by 15%.

This carbon price is nearly two to four times higher than the price being used in Congressional Budget Office (CBO) modeling in the United States.

The CBO estimates that the price of GHG allowances would rise from about US$15 per mtCO2e of emissions in 2011 to about US$26 per mtCO2e in 2019. It estimated the cost to US households would US$175 a year, or less than $350 in New Zealand dollars.

At the US$26 top end estimated price, this would be about NZ$54 per tonne, the New Zealand Business Council for Sustainable Development says today.

The current carbon price is about NZ$28 per tonne.

The NZIER-Infometrics economic model being quoted in New Zealand also does not take into account the other positive economic opportunities which can arise from putting a price on carbon. These include greater energy efficiency in homes and businesses, new export opportunities for low-carbon products, technology and services, and new clean economy jobs.

The US predictions for fixing acid rain with a cap and trade scheme were twice the actual cost for the actual reductions achieved.

Business Council Chief Executive Peter Neilson says modeling, assuming the rest of the world does little, does not fit with current reality: more than 58 countries and jurisdictions around the world either have or are planning emissions trading schemes.

The scenarios NZIER and Infometrics use are also based on an assumption, according to the report, of “no change in technology or forestry in response to carbon prices”.

However, the Ministry of Agriculture and Forestry (MAF) says in the report that a carbon price of $20 per tonne would lead to up to 100,000 ha of forests being planted.

“On that basis, a carbon price of $200 per tonne would lead to nine times that volume being planted. At even $100 per tonne, most sheep and wool farmers in New Zealand would find it economic to convert all their land to forestry,” Mr Neilson says.

Some 30 million tonnes of carbon will be sequestered (stored by trees) by 2020 with a carbon price of $20. So at $200 per tonne, as NZIER and Infometrics assume, there could also be a nine fold increase in sequestration. New Zealand would go into an emissions surplus, which it could sell on world markets.

“If you believe in the $100 to $200 per tonne figures, you also need to accept they will result in a forestry response that would virtually offset all of New Zealand’s emissions per year – and would therefore greatly bring down the cost of the policy to households and others,” Mr Neilson says.

The emissions reduction targets being discussed are part of a negotiation, and no Government will go in offering its highest potential reduction target first up. These negotiations are likely to continue into 2010.

Mr Neilson says the Business Council welcomes Climate Change Issues Minister Nick Smith’s statement on TVNZ’s Q and Q programme yesterday that he seeks a multi-party agreement on the emissions trading scheme (ETS) and an amending bill in the House this year.

“The Minister wants a workable ETS and says the price signal it sends to the energy sector is a priority for him. This will boost investment in renewable energy.

Meantime, the country also needs to consider other policies to help households and businesses adjust to carbon prices. Transitional assistance to households, estimated to cost $180 million a year, was part of the Labour-Green deal last year to pass the ETS law.

“Both National and Labour agree that an ETS should be revenue neutral: money the Government raises by selling emission credits to firms which exceed their emissions targets should not go into the general tax pool, but be ploughed back into other emissions reduction or assistance measures.

“This will provide the money to help households and businesses, and fund other complementary policies, like growing trees, sell the world New Zealand-invented low-emissions technologies, encourage widespread take up of farm practices to lower emissions, and help vehicle owners switch to lower-emission vehicles,” Mr Neilson says.

Meantime, concern over households paying up to $3000 a year, with world carbon prices at $100 to $200 per tonne, need to be discussed within the context of the models used, and the opportunities they exclude.

The Congressional Budget Office’s July report on the costs of the United States’ proposed emissions cap and trade regime are at http://www.cbo.gov/ftpdocs/103xx/doc10376/hr2998WaxmanLtr.pdf

Business Council research on complementary policy options and levels of support for them along New Zealanders is available at http://www.nzbcsd.org.nz/story.asp?StoryID=987

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Political Twins, And On Labour Extending Its Wage Subsidy Scheme


A quick quiz for the weekend. Which political party currently represented in Parliament issued a press release yesterday that contained these stirring passages:
“[We have] long supported a free trade and free movement area between Canada, Australia, New Zealand, and the United Kingdom…on trade, immigration and investment, New Zealand must favour countries who share our values. New Zealand must do its part to reinforce freedom and democracy around the world by diversifying our markets and building stronger relationships with those who share our values... More>>

 

Parliament Adjourns: Adjournment Debate: Speaker Trevor Mallard

The 52 Parliament has sat for the last time before the September Election. It sat for 245 days... More>>

ALSO:

E-Cigarettes: Vaping Legislation Passes

Landmark legislation passed today puts New Zealand on track to saving thousands of lives and having a smokefree generation sooner rather than later, Associate Health Minister, Jenny Salesa says. The Smokefree Environments and Regulated Products (Vaping) ... More>>

ALSO:


National: $4 Billion Investment To End Wellington’s Congestion Woes

A National Government will invest another $4 billion in transport infrastructure across Wellington, igniting the economy and delivering the congestion-busting solutions the region has long been crying out for, National Party Leader Judith Collins says. ... More>>

ALSO:

Gordon Campbell: On The Virtues (and Fluffed Opportunities) Of The Operation Burnham Report

One unspoken rule of thumb in any official public inquiry is : whatever you do, don’t conclude you were made to listen to “a litany of lies” even if the evidence of a deliberate cover-up is right there under your nose. In that respect, the report ... More>>

ALSO:


Horizon Research Limited: How Judith Collins Stopped The Bleeding

Horizon Research includes questions on voting from time to time in its surveys – for both forthcoming referenda and general elections. More>>

Your Vote 2020: Bringing Election Coverage To Viewers Across TVNZ Channels And Platforms

As New Zealand gets ready to head to the ballot box this September, 1 NEWS is bringing voters comprehensive coverage and analysis of this year’s General Election. TVNZ’s coverage will draw on the depth of experience held across the 1 NEWS team, says Graeme ... More>>

Economy: 30% Believe Households Worse Off, 298,000 Expect To Lose Jobs

64% of New Zealanders feel the economic position of their households is the same or better than a year ago – and 30% think it is worse or much worse, while 298,000 think they will lose their jobs in the next 12 months. Households’ perceptions ... More>>

State Services Commission: Findings Of Investigation Into COVID-19 Active Cases Privacy Breach

Deputy State Services Commissioner Helene Quilter has today announced the findings of an investigation into a breach of privacy regarding sensitive personal information. The investigation looked into who or what caused the disclosure of the information, ... More>>

International Security: New Zealand Suspends Extradition Treaty With Hong Kong

The New Zealand Government has suspended its extradition treaty with Hong Kong and made a number of other changes in light of China’s decision to pass a national security law for Hong Kong, Foreign Affairs Minister Winston Peters says. More>>

ALSO:


 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 


 

InfoPages News Channels