Sunday, June 13, 2010
Michael Barnett: Emissions Trading – Persuade usLabels: emissions trading
The increased energy prices - power up 5% and petrol up 4c/litre – that come with the introduction of the ETS will make no difference to reducing New Zealand’s 0.2% contribution to the world total of green house emissions however the unfairness is that mainstream businesses and New Zealanders will meet the cost of the emitters by way of a disguised tax.
This is because 48% of NZ green house emissions are in agriculture which is outside the scheme and a further 20% is in transport, a sector where New Zealanders don’t yet have affordable options to purchase low energy using vehicles.
It would also seem that the basis of the ETS is counter – productive to our efforts to increase trade and foreign exchange earnings, especially when there could be alternative actions we could be taking – actions that would seem to fit alongside the Pure and Green values we promote alongside the NZ brand.
The design flaws in the current scheme have been widely debated:
• NZ’s contribution to green house emissions is just 0.2% of the world total. This compares with Australia 1.4%, Japan 3.5%, and USA 18% and China 20%.
• 48% of the NZ total is made of emissions from agriculture, which rises to above 50% when the agriculture portion of the 20% that transport contributes is added in.
• That is, without serious action to reduce agriculture emissions and make a major effort in transport by adopting an affordable fleet of low carbon emitting vehicles, there will be little impact on the New Zealand contribution to reduce world emissions.
• The original justification of Government for introducing the ETS was that it would bring New Zealand into line with other countries expected to sign up to plans to reduce emissions at the Copenhagen Summit held earlier this year. However, other countries, especially major trading partners, Australia, United States, Japan and China haven’t signed up.
• Instead, all we are doing is penalising ourselves and undermining the international competitiveness of our exporters.
To get back on track with a meaningful emission reduction scheme, I would suggest we need a comprehensive long-term strategy based on the following principles and design elements:
• At the very least, NZs ETS should be aligned with Australia as far as possible.
• NZ should move in line with trading partners – not kick itself in the shins.
• For any NZ ETS scheme to be a success it must impact significantly on the major emission contributors – i.e. agriculture and transport.
• An adjunct should be a re-energized strategy for forestry planting of similar scale that NZ led the world on in the 1930s.
I strongly believe that if the Government could muster the courage to withdraw the ETS and focus on developing a long-term strategy to develop technology to get emissions cuts in agriculture and transport supported by a co-operative/ collaborative government-business partnership to encourage commercialization of goods and services that reduce emissions, we would win back the respect of the public on this issue and enhance our international reputation as a nation that truly does care about its environment.
It would be a win for tax payers and a win for New Zealand’s global brand.
Michael Barnett is the Chief Executive of the Auckland Chamber of Commerce.
at 9:14 PM