Ministers told to put price on carbon

23 November 2006

Energy leaders tell Ministers to put price on carbon

Energy sector leaders told Ministers in a special closed-door Energy Future Forum today to put a price on carbon to help cut emissions and manage climate change.

Energy sector leaders told the Energy Future Forum, organised by Deloitte and the New Zealand Business Council for Sustainable Development, and attended by the Deputy Prime Minister, Hon Michael Cullen, and Energy Minister Hon David Parker, that there is a general consensus a price needs to be put on carbon.

There was significant interest in what mechanism should be used to do this and the Ministers and executives discussed possible carbon trading regimes, the Business Council's Chief Executive, Peter Neilson, says.

Several companies have been working on possible carbon or emission trading regime concepts, and some have already put views to the Government.

The Government is looking for further submissions after it publishes its energy, climate change and energy conservation strategies, possibly next month.

"There is also a consensus that any carbon charge should have wide coverage, including agriculture, the largest emissions source and the hardest to reduce," Mr Neilson says.

The forum also learned that, as a result of work done by the Ministry of Foreign Affairs and Trade and Ministry of Agriculture, to raise international awareness on the problems of tackling greenhouse gas emissions from ruminant animals, several countries had expressed strong interest in supporting or joining in New Zealand research to tackle the problem.

The 17 energy sector leaders also advised Ministers to keep the widest possible range of energy sources open for use in New Zealand.

Mr Neilson says nuclear has been deemed unpopular, large hydro generation is being made almost impossible under the RMA and now some were attacking coal.

"The truth is New Zealand needs to keep open options for a good mix of energy sources. What may be considered a high emission fuel today, like coal, could well become the clean fuel of the future when CO2 emissions from coal plants are captured and buried securely underground."

Other issues discussed included options to reduce vehicle emissions, including the idea of a ban on importing cars over 7 years old, introducing a requirement on car importers to ensure a weighted average fuel economy based on engine size (so a balance of large and small engine sizes enter the fleet.)

"Some disputed whether engine size is the best indicator of emissions standards given the great advances in engine technology. Some of the larger cars now have the fuel economy of hybrids," Mr Neilson says. "Something needs to happen to incentivise the mass purchase of fuel efficient, low emissions vehicles, so our aged car fleet is cleaned up quickly."

Transport is the second largest emitter of greenhouse gases.

Other issues discussed included possible incentives to develop renewable energy and encourage forest planting.

There is also evidence New Zealanders will get behind efforts to lower emissions if they're offered the chance. Evidence of this is Landcare's CarboNZero scheme, where people offset their household, car and other emissions by buying credits. The money goes to planting trees to create forest carbon sinks.

ENDS

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