Media Release

12 May 2008

DCANZ calls for changes to Emission Trading Scheme

The Emissions Trading Scheme needs to be changed to avoid cutting dairy exports by 18% and losing around 11,000 pastoral sector jobs says DCANZ Chairman, Earl Rattray.

Presenting on behalf of New Zealand’s seven dairy companies to the Finance and Expenditure Select Committee today, Mr Rattray warned that being first in the world to impose a price on agricultural emissions could have a significant impact upon the New Zealand economy.

“Punitive pricing that neither considers the technology we have available to reduce emissions or whether our competitors face comparable costs, will have a negative impact on our economy and do little for global emissions.

“NZIER research shows that our pastoral sector will shrink by 8%, dairy exports could fall by 18% long term and at least 11,000 pastoral sector jobs will be lost nationwide - with the impact being felt hardest in regional economies. 

“The New Zealand pastoral sector, and its associated services, contributes an immaterial fraction of total global greenhouse gas emissions.  We believe without appropriate amendment the ETS cost to our industry, and with it our economy, will be completely out of proportion to any contribution we can make to reduction in greenhouse gas emissions.

“This economic impact will also come at a net cost to the environment.”

He told the Committee that the New Zealand dairy industry was “low carbon” (or low greenhouse gas) compared with its offshore competitors.  He cautioned that the ETS, in its current design, would not contribute to the reduction of global emissions. It would just allow other less carbon efficient offshore competitors to fill the demand for dairy, increasing overall global greenhouse gas emissions.

“DCANZ does not dispute the need for a price-based policy response to climate change in New Zealand. But it needs to be done in a way that encourages the right behaviours and produces a positive outcome,” said Mr Rattray.

DCANZ believes an ‘intensity-based’ scheme is more appropriate for New Zealand, as it better balances the need to reduce global emissions with the need for efficient food production. 

“Focusing on reducing greenhouse gas emission per unit of production or ‘emission intensity’ would reward and encourage greater efficiency of New Zealand food production.  It would also better align with consumer interests in seeing the greenhouse gas efficiency or ‘carbon footprint’ of a product they are buying.”

“Consumers have an important role to play in driving down global emissions, so we need to focus on providing them with appropriate choices of goods and services.”
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