Media release

4 May 2005

Carbon tax – a transition

The New Zealand Wind Energy Association (NZWEA) today welcomed the release of the Government’s carbon tax policy, but hoped it was a short-term step towards a more effective international emissions trading regime.

NZWEA Chief Executive, James Glennie, said Government was to be commended for coming up with a policy to address climate change.

“It is important that we take action now to address the risks that uncontrolled emissions of carbon dioxide and other greenhouse gases pose to our climate and our future,” he said.

“While wind energy is already competitive with any other form of generation, this policy will further improve the economics of wind energy relative to thermal generation.”

Mr Glennie said that through encouraging renewable energy development, the carbon charge will also improve New Zealand’s security of energy supply in the face of sharply increasing prices for fossil fuels.

“However, whatever mechanism we use to reflect the costs of carbon, it must not damage the international competitiveness of New Zealand companies by leaving them with significantly higher energy costs than those of overseas competitors.

“In this respect, the Negotiated Greenhouse Agreement (NGA) process has yet to prove itself as an effective mechanism in meeting this challenge,” he said.

Mr Glennie said the NZWEA supported the carbon tax as a short-term solution while New Zealand prepares to enter the international emissions trading regime.

“Emissions trading is a superior system in that it allows greater flexibility, transparency, and liquidity relative to taxation, and it does all this at lower cost,” he said.

“The carbon tax is developing very quickly and has already enabled business to develop the skills to establish New Zealand as a major player in Asia-Pacific emissions markets.

“Entering the emission trading market would be much simpler to administer than a carbon tax. It would be good for business, the environment and the wind industry and we hope to see Government take the next step very soon,” said Mr Glennie.

Over the last 12 months the wind industry has been the fastest growing energy sector in New Zealand with growth of 360 per cent. Seventy MW of new capacity has been consented in the last four months and more than 200 MW is in the consent process.

The NZWEA has more than 60 members including some of New Zealand’s largest electricity generators, retailers and distribution companies.

ENDS

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