Carbon emissions target earns support

Sunday, May 13th, 2007

Carbon emissions target, trading regime, earn support

Business would support a target to cut carbon emissions by 50 per cent by 2050, the Employers & Manufacturers Association (Northern) says.

"It would be a stretch, but one business could live with," said Alasdair Thompson, EMA's chief executive.

Mr Thompson was commenting on the Whangarei speech on climate change by National's leader, John Key, today.

"Adopting a goal like this would help restore business investors' faith in our policy makers.

"Along with the plan to place a cap on emissions and establishing a trading system to achieve carbon reductions, it would minimize the financial impacts on the economy while delivering large benefits to the environment.

"Whether we have a goal of carbon neutrality or simply emissions reduction, it will be necessary to have an international trading regime.

"New Zealand needs investment certainty without new regulations or taxes, which are always onerous and add the risks of unintended consequences.

"But recent announcements by the government, the NZ stock exchange and the National party look to be fast tracking emissions trading as opposed to introducing a narrow based price on carbon as was previously mooted by government.

"There are a number of issues around emissions trading being ignored that need to be addressed if New Zealand is to maintain its strong environmental reputation while growing our economy.

"While business must have a way to purchase credits to offset necessary emissions, and these must be an integral part of an effective trading scheme, we do not want to see government devolving their Kyoto liabilities to the economy when there is no viable mechanism for business to either reduce their emissions or to purchase Kyoto approved credits.

"Government needs to spread its Kyoto liability for reducing carbon emissions across the whole economy, not just load it on industry.

"Business has been apprehensive about the government's commercial nous and public policy capacity on its carbon emission reduction plans ever since the billion dollar carbon "windfall" turned into an equally large deficit.

"In the absence of any government plan for achieving carbon neutrality, the National plan seems realistic.

"The commitment by National to reform the Resource Management Act so that consents for generating renewable energy, is welcome.
In fact some cabinet ministers have said privately they support the same approach.

"National's intention for planting trees to create carbon credits has to mean forest owners will own the newly created carbon credits or else some other form of incentive will be required.

"The incentives proposed for dairy industry research into reducing cow methane emissions are also welcome.

"We need to remember too that adopting world best energy efficiency standards are the most practical and effective way to reduce carbon emissions, and the most cost effective."

Further notes:

The government has stated it will not implement a full emissions trading scheme until post 2012, and has undertaken to hold off on any action that will impact on New Zealand companies competing in their traditional export markets.

These issues present problems for fast tracking a Kyoto-compliant emissions trading scheme, as the current Kyoto agreement has a finite life and currently does not extend beyond 2012.

While Kyoto participants are in discussion on the post 2012 position, an agreement similar to that for the 2008 - 2012 period will be impossible to broker unless all countries, both developed and developing, are included.

EMA and Business New Zealand have a comprehensive programme, including:

New Zealand adopt the target of reducing carbon emissions by 50 per cent by 2050 commence 1st January 2009 or sooner.

Our Kyoto liability should be ring fenced as at 1st January 2006 and that the taxpayer assumes that liability for the 2008-2012 period.
Government should allocate credits and liabilities to all sectors based on the situation existing at 1 January 2006.

Any increase in our liability from 1st January 2006 be borne by the emitters responsible.

Government set a pathway to achieve the proposed target reductions, and adjust it every three years.

Government encourages the development of a voluntary trading platform or platforms by the private sector.

Establish an internationally approved measuring and monitoring programme for all greenhouse gases, including the agricultural and forestry sectors, for the private sector to operate. Any voluntary trading platform must only deal in internationally approved products.

ENDS

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