Carbon trade proposals could destroy economy

Friday, April 24th, 2008

Carbon trade proposals could destroy economy

before climate change

For common sense to prevail the Employers and Manufacturers Association (Northern) is urging our law makers to think long and hard about the effects of the Climate Change (Emissions Trading and Renewable Preference) Bill.

"We are very concerned about forecast job losses if the proposed carbon emissions trading scheme is introduced, said EMA chief executive Alasdair Thompson.

"We take heart from warnings raised by the Greenhouse Policy Coalition in the New Zealand Herald (April 23, p A17). The views expressed are sensible and rational, and need far more consideration before New Zealand jumps the gun on emissions policy.

"Economic modeling from business consultants Infometrics, NZIER and the Australian Bureau of Agricultural and Resource Economics all conclude that if we proceed with our proposed cap and trade scheme we will suffer a 40 per cent reduction in dairying and 31 per cent cut in the metals sector.

"52,000 job losses will result across the economy with carbon priced at $25/tonne (below the current price of $36/tonne).

"These are severe economic impacts, not alarmist.

"We support the Greenhouse Policy Coalition in its insistence on a good environmental outcome provided it is balanced with continued economic growth.

"Certain aspects of the proposed scheme are of huge concern, including:

* The bio fuels obligation makes no sense as the amount of carbon emitted in producing the bio fuels would exceed the emissions saved by using fossil fuels. There would also be negative impacts on food pricing.

* The Government is interfering with the market by banning thermal stations.

* The methods by which the 'free allocation' (of carbon trading units) are made are ridiculous, eg, a company has to emit a minimum of 50,000 metric tonnes of carbon a year before it can qualify for a free allocation yet (smaller emitting) dairy farmers are exempt.

"A report from the government/industry Agricultural Technical Advisory Group on the impact of these measures on farming would be some sheep and beef farmers may have to convert their land to forestry.

"Responsible law making requires rational, sensible and honest approaches to this far reaching piece of legislation."

ENDS

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