Europe Sends New Zealand A Message On Climate Change

A European Union announcement today of its most ambitious policy ever on climate change sends another strong signal to New Zealand to also act or run the risk of future trade restraints.

The European Union's executive branch has now proposed the 27-nation bloc reduce greenhouse gas emissions by at least 20 percent by 2020 compared to 1990 levels, with the possibility of going to 30 percent if other developed countries join in.

The targets are part of new European Commission proposals for a broad EU energy policy that aims to boost production of renewable fuels, cut energy consumption, and reduce the dominance of big utility companies over EU gas and electricity markets.

The new goal goes beyond an existing target for an eight percent cut in emissions from 1990 levels in the 2008-2012 period adopted by the 15 members of the EU before its 2004 enlargement, which several countries are struggling to meet and is now subject to approval by member states.

The EU has renewed its calls on the United States -- the world's biggest emitter -- and other major economies to drop their opposition to binding targets for emissions cuts.

The EU's move to face up to climate change and act means New Zealand needs to take effective action to cut emissions if it is to avoid potential future trade barriers, the Chief Executive of the New Zealand Business Council for Sustainable Development, Peter Neilson, says.

"The EU is a major trading partner. In a world going green, we can't afford to get out of step. It will potentially come back to haunt us with flawed food-miles type arguments as those who are paying to reduce emissions revolt against the freeloaders who are not."

Mr Neilson says the French Prime Minister, Dominique de Villepin, argued last year that "Europe has to use all its weight to stand up to environmental dumping," and that France would this year put forward a proposal for the EU to study "the principle of a carbon tax on the import of industrial products from countries which refuse to commit themselves to the Kyoto protocol after 2012".
The green border tax idea is backed by the EU Industry Commissioner and European environmental groups, but opposed by the EU Trade Commissioner who favours a world free trade deal on green technology and European businesses who say it could spark a trade war with non-Kyoto countries like the United States.

Mr Neilson says all sectors in New Zealand have an excellent opportunity to produce a business-friendly and effective climate change policy this year in response to Government policy options papers on energy, farming and forestry, published in December.

These include possible emissions trading in the forestry and agriculture sectors before 2012, and special funds to boost investment in low-emission technology and research.

"Moves like this will help significantly to secure our trade access abroad. It's important New Zealand is seen to be doing something significant to reduce its emissions," Mr Neilson says.

"Our own Government, and now the EU, are sending a strong signal that future production will have to cover the cost of carbon. The initial reaction may be that this might make New Zealand uncompetitive. New Zealand is already producing fewer emissions per kilogram of milk or meat protein than other countries, but if we don't tackle emissions in business-friendly ways, then we're vulnerable to flawed food miles arguments and increasing consumer preference worldwide for greener products and services.

"The price of carbon we are talking about currently, of less than $20 per metric tonne, is only one fifth of the increase in energy cost we saw earlier this year when petrol went up to $1.71 a litre, the equivalent of a carbon tax of more than $100 per tonne."

Mr Neilson says there are exciting and major opportunities for the country and farmers to profit from the bio fuels industry (by growing bio fuel crops, and using resulting low-emission feed products for stock), other research to lower animal methane emissions, and the global commercialisation of a New Zealand venture which can make bio fuel from sewage pond algae.

"Our research also shows that, even in taking simple steps to measure and reduce emissions through initiatives like energy conservation, New Zealand businesses stand to put more than $109 million a year straight onto the bottom line."

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