Energy strategy a costly double-whammy

Media release October 11, 2007

Energy strategy a costly double-whammy

Complexities around the government's energy strategy will inject extra costs into the economy with no extra benefit to the environment, says Business NZ.

Chief executive Phil O'Reilly says New Zealanders are now likely to be hit twice - as carbon is due to be priced into the economy through the proposed emission trading scheme and now, through the wide ranging regulations under the energy strategy too.

The emissions trading scheme will see households and businesses meet the cost of carbon on their electricity bills and the strategy - as it regulates for more efficient appliances - could see them pay more for home appliances such as the fridge as well.

"We believe the more appropriate price signal is the one that comes through in the price of power, because that allows people an element of choice. Having both measures is much less flexible."

Also included in the strategy are plans to ensure no more thermal plants are built for at least ten years, that renewable energy generation is given priority, that more fuel efficient vehicles are imported and that home owners adopt renewable energy sources and greater levels of insulation.

Mr O'Reilly says the purpose of a well designed emissions trading scheme is to deliver a price of carbon into economy which will provide incentives for these things to happen anyway.

"The government appears to be saying it doesn't have faith in its own emissions trading scheme," says Mr O'Reilly.

"I'm sure New Zealanders would be keen to help lead the way in creating a more sustainable economy. But they would also hope policy design would lead to a more competitive economy as well.

"We don't see any evidence that this strategy will enhance our competitiveness, improve our living standards or achieve enhanced economic growth."

ENDS

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