Environment And Conservation Organisations Of NZ Inc.
Wellington - 14 September 2009

Emissions Trading System changes major reversal

The National and Maori Parties’ agreed changes to the New Zealand Emissions Trading System are a major disappointment and will more than halve the effectiveness of the control of climate and ocean damaging pollution, the Environment and Conservation Organisations (ECO) says.

Emissions will climb, but the scientists are urgently telling us we must reduce emissions fast says ECO co-chair, Cath Wallace, who is also a Senior Lecturer in Economics. “This is not going to help New Zealand meet greenhouse pollution reduction targets needed by 2020 or the 90 percent cut required by 2050.”

“The changes allow 65 large companies long periods of subsidisation by taxpayers, particularly households, right out to 2050, with farmers and the fishing industry getting especially large subsidies.”

”Farmers do not have to even start paying part of the costs of their pollution until 2015, while the subsidy to the fishing industry rises from 50% to 90% of the costs of its emissions.”

“Struggling households and small businesses will have either to pay for these subsidies in their taxes or to forego public services like health care and education. The government’s own figures show an increase in taxpayer subsidy to polluters by at least $400 million.

“The new subsidies will have trade implications too because they mean New Zealand will no longer be able to claim that farming and fishing are not subsidised. These subsidies are set to continue right out to 2050 rather than to 2030 as previously set by Labour, which was already too long.

“Not only do these subsidies lead to inefficiency and unfairness, they will also send wrong price signals to investors which will result in a deadweight loss to society as well as harming the climate.”

“New Zealand’s international standing, especially in Europe and the Pacific, will be seriously damaged by the failure to take a strong stand to reduce emissions and by this back tracking and subsidization. The effectiveness of the scheme will be at least halved.”

ENDS

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