4 May 2005

Councils should start planning for carbon tax

Local Government New Zealand’s President Basil Morrison says today’s carbon tax announcement could mean running day to day services becomes more costly for councils if they do not find alternative energy supplies to fossil fuels.

The Government has decided to introduce a tax on the consumption of fossil fuels and industrial process emissions of carbon dioxide and fossil methane, it comes into effect from the 1st of April 2007.

“This tax will impact on most local authorities who rely on fossil fuels for many aspects of their infrastructure and utility needs. Councils will have to absorb the new tax in their day to day expenditure or switch to alternative energy supplies,” says Mr Morrison.

“We are seeing councils like Christchurch City planning for the future already, a fantastic example is the way they plan to pipe methane gas from the landfill to use as an energy source at the city leisure center. Initiatives like this have a positive effect on the environment and help to keep costs down.

“Councils have two years to change the way they consume and use fossil fuels to prepare for the tax. This gives them time to investigate avenues to avoid aspects of the tax, such as joining the Communities for Climate Protection Programme. Fifteen of our councils have already joined this programme which helps councils reduce their greenhouse gas emissions by moving to more efficient electricity and fuel consumption. Councils may also look for examples from overseas councils where similar taxes are in place,” said Mr Morrison.

The tax is part of the Government’s 2002 Climate Change policy and revenue will be recycled back into the economy through tax rebates.

ENDS

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