Timing is everything with ETS

“Government has failed to listen to business on the timing for an Emissions Trading Scheme (ETS) as part of the Bill tabled in Parliament today,” said Ralph Matthes, Executive Director of the Major Electricity Users’ Group (MEUG).

“Business recognises that climate change policies need to be progressed. Doing nothing hasn’t been an option for some time. Neither should the option of rushing in when every other country in the world is taking more measured steps recognising the potential harm policies might have on their economies.

“One of the main issues raised by business has been the timing of a New Zealand ETS.

“The New Zealand Institute (David Skilling) report recommendation was “We recommend that New Zealand adopt a ‘fast follower’ approach with respect to emissions reduction, and move no faster than comparable countries.”

“The Castalia (Alex Sundakov) report for the Greenhouse Policy Coalition in recommending we adopt realistic timeframes said, “an approach that involves careful and calculated progress with the ability to assess consequences to date and gain political support for additional steps is far more likely to be politically credible and sustainable than a trail-blazing approach that sets New Zealand on a predetermined path without a clear idea of the consequences.”

“To put this into perspective if New Zealand adopted the planned timing Australia has proposed for their ETS, then New Zealand consumers would save $2.4 billion (assuming $30/t CO2-e). A reasonable question any New Zealander would have is why are we paying so much more ahead of our Australian neighbours?

“The explanatory note to the Bill, the discussion on issues raised by submitters and the options considered didn’t even mention the relative costs and benefits of alternative timeframes for introducing the ETS. This oversight in considering the optimal timing of an ETS if carried through into final legislation will be very costly to the economy and that cost will inevitably be borne by consumers” concluded Mr Matthes.

ENDS

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