Environment and Conservation Organisations of New Zealand Inc
P O Box 11-057, Wellington. eco@reddfish.co.nz

Tuesday 8 May 2007 – Wellington

Greenhouse Gas Emissions Permits Allocation Key Issue Economist

Climate change Minister David Parker’s announcement that there will be a limit (or “cap”) on emissions on greenhouse gases in New Zealand has been welcomed by the Environment and Conservation Organisations of New Zealand, ECO.

Cath Wallace, co chair of ECO and a specialist in the economics of environmental management, says “the news that the government will ensure there is a cap is welcome – but it must be stringent.”

“ECO welcomes the announcement that the cap will apply to all the sectors of New Zealand, including agriculture.”

Wallace agreed that the Green’s suggestion that the cap be set at 1990 levels is the only limit that will conform with New Zealand’s Kyoto obligations.

“It will be critical that those who pollute are not issued with the pollution permits: these should be either auctioned or issued to everyone. Allocation to each New Zealander would then give each person an incentive to reduce their emissions.”

“The Minister’s statement implies that the allocation will be only made to large polluting industries.” Cath Wallace said this would be quite wrong. “It makes the politics easier, but it would be a huge wealth transfer to those who pollute and deprive the community of funds to help adjustment to a carbon constrained future.”

“The Intergovernmental Panel on Climate Change Working Group III report on Friday was very clear that countries need to retain revenues from any cap and trade system. These should be used for investment in low-emissions options such as energy efficiency and could be used to assist low income communities and those hardest hit to cope with increased energy prices.”

“Any allocation of the permits to those who pollute, whether in agriculture, transport or electricity generation, would rob society of the revenues that an auction would yield and that could be used for helping to find further solutions.”

“The Minister has referred to the fisheries quota management system as a success. This is a myth: orange roughy stocks and hoki stocks, two of the biggest export earners, have been grossly overfished.

“The allocation of fisheries permits to those already overfishing exacerbated the problem by allowing fishing interests to invest heavily in influencing decision makers by legal threats and other means to not make needed reductions in fishing limits. New Zealand should not make this mistake twice.’

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