Boscawen Says Several Nats May Rebel On ETS

ACT MP John Boscawen claims National backbenchers as well as some senior Government Ministers now want to defer the emissions trading scheme.

Speaking on TV3’s “The Nation” Mr Boscawen said the Government needed to immediately to defer the scheme now that Australia has decided to defer its scheme.

The New Zealand scheme is due to begin on July 1.

“I've heard from several sources in recent days that several members of Cabinet are concerned, “he said.

“Back bench lobby MPs are lobbying Cabinet Ministers, they're very concerned about the damage it's going to do to New Zealand and the damage there is to their re-election prospects.”

Mr Boscawen also challenged Climate Change Minister Nick Smith’s claim that scrapping the scheme would cost $1.2 billion in compensation to foresters.

“That’s rubbish because his officials told me in my office on Thursday that more than a third of that relates to pre 1990 forests and is a key difference,” he said.

“ Second point why would you pay compensation, why are we giving subsidies massive subsidies to farmers who planted trees in 1990, 91, 92, 93, 94, 95, before the Kyoto Treaty even came into being, let alone ratified by New Zealand. “

Mr Boscawen claimed the total compensation payable by the Government would be only $20 million at the most.

Labour MP Charles Chauvel agreed with Mr Boscawen saying the scheme was not well designed.

He said the only reason National was not deferring the scheme was that it thought it had to write a cheque for the sum claimed by Mr Smith.

STEPHEN Australia has scrapped it's ETS, is it time we did the same, many in our business community claim our scheme is an unnecessary burden on exporters and farmers, they ask why is this country having a carbon trading scheme when many other countries seem to be dragging the chain, are they right. Well joining me now for a discussion on this is Kennedy Graham, Charles Chauvel and John Boscawen. Let me start with you John, you may be entirely predictable on this but should New Zealand scrap its ETS in wake of the Australian go slow or stoppage on their version?

JOHN BOSCAWEN – ACT MP
It absolutely should, we are crazy to be leading the world cos that’s exactly what we're doing, Mr Smith proudly told parliament last year that we'd be the world leaders, we'd be the first country in the world to have an all sectors, all gases ETS, and he's been proved to be wrong time and time again. We absolutely must at least delay this until at least 2013, and it's not just a burden and a tax on businesses and farmers, it's a tax on everyone, everyone.

STEPHEN Scrap or delay?

JOHN As a minimum delay, absolutely delay, and the ACT Party would give the National Party the votes to delay it and as I say Treasury forecasts are 5% increase in electricity, so everyone pays, not just businesses, everyone.

STEPHEN Kennedy what do you think?

KENNEDY GRAHAM – Green MP
All 122 Members of Parliament should take more heed of the advice of the Parliamentary Commissioner for the Environment, who offers independent advice to Members of Parliament, and she said do not align the New Zealand ETS scheme with Australia's. So what happens in Australia is up to Australia, what happens in New Zealand is up to us.

STEPHEN Okay so what happens in New Zealand's up to us, and there do seem to be growing voices in the business community who are worried and certainly want to delay, we've heard Federated Farmers talk about a delay, I think the Auckland Chamber of Commerce are unhappy, there's been Business New Zealand Major Users Group etc, surely their voices should be heard as well.

KENNEDY Oh of course their voice is always heard and always respected, and with great respect to the farming community and the business community, they will always of course have an interest in deferring cost, but they're obliged to do that, we understand that. There is a broader interest, there's the interest of all New Zealanders in combating climate change, there's an interest on the part of humanity as a whole in combating climate change, so there's a broader interest and we have a national responsibility to combat climate change, so we have to factor that short term sectional interest into the broader interest and offering them actually an opportunity to make a fast switch to a low carbon economy.

STEPHEN Charles what do you make of this, obviously you know the movements with the Australian government, Nick Smith has been talking about the review period and he seems to have accentuated the review period, where does Labour sit on this?

CHARLES CHAUVEL – Labour MP
Well the problem with the call to suspend the ETS is that we have international obligations under the treaties that we've become a party to, we have to pay a price, and that price either has to be paid by the polluters themselves, or if not by all taxpayers. So if you suspend the ETS which is the mechanism that attempts to shift costs to the polluters, guess who pays, you me and every other taxpayer. There's really no way around that, which is why Labour doesn’t agree with the calls to suspend the ETS and why we're pleased that groups like Business New Zealand in the last day or so have come out and said look it's time to stop having all these pendulum swings in policy, we need certainty, we need to just get on and bed the thing down and make it work.

STEPHEN ... numbers are against you then aren't they?

JOHN No they're not and Charles has made the mistake because we don’t actually have to pay anything, and Minister Smith put out a statement last Friday week saying that we're in credit, we're in credit to about 450 million dollars, and we won't be actually paying anything, and right now there is no international commitment for us to pay anything from 2013, there is actually no international agreement and I had the Minister's officials in my office on Thursday, and they acknowledged that under what this government's proposing to do, it's proposing to pass out subsidies of literally billions, 1.8 billion dollars to foresters of credits which they can sell, and if there isn't a subsequent agreement to 2012, subsequent to Kyoto Agreement, they’ll have windfall gains, they won't have to surrender units when they chop down their trees, and what we've gone is we're putting a massive tax on everyone. Now Kennedy talks about businesses, it's every New Zealander, we've got 200 million dollars of windfall profits are going to go to the electricity generators, every single person, pensioners will pay, farmers will pay, the low income will pay, all families will pay, and you cannot deny it, it's an absolute fact.

STEPHEN Well do you accept, is the home owner bearing the cost ....

JOHN Everyone's bearing the cost.

CHARLES Well at the moment the ETS when it comes into force will start to shift the burden on to the polluters themselves, on to everybody who has a responsibility for pollution, that shift comes from ordinary individual taxpayers who bear the liability at the moment, and John's not quite right to say that there isn't a liability, the New Zealand government has a Kyoto liability at the moment of about half a billion dollars, if you suspended the ETS tomorrow you'd have to refund all those foresters who've been given carbon credits and who in some cases have sold them on, that’s to the tune of another billion. So what John says might sound attractive on its face but it actually has a very big cost to New Zealand taxpayers.

STEPHEN I'll come back to the foresters in a moment, I just want to ask you about this, I mean this is a highly symbolic thing we're doing, I mean do the Greens accept even if we retain our ETS we're not ultimately going to make that amount of difference to global warming, it's pure symbolism.

KENNEDY No it's more than symbolism, we are substantive to the extent of our population. We're four million people, well that’s four million people, we emit 61 million tonnes a year or now 78 million tonnes a year, that’s significant. We export coal, we shouldn’t, that’s significant, everything we do is significant proportionate to our size. So what we do is the same in principle, is the same challenge of China or United States, so it is important to get it right as to what we're doing.

STEPHEN Yes but unless China and the United States and Australia, all big coal producing countries are actually taking concrete measures themselves, what we do is really just a tiny drop in the ocean.

KENNEDY Well it is tiny, but let's not delude ourselves that there isn't progress in various kinds going on in those countries, China has just eclipsed the rest of the world in terms of transfer to wind power and solar.

CHARLES There's another important point to make, and that is since the announcement by the Rudd government there seems to be the assumption that Australia's not doing anything, in fact Australia at a Federal and a State level has been spending enormous amounts of money on measures to try and get their carbon pollution down, in fact they're doing a far better job than the New Zealand government in doing things like promoting energy efficiency, getting a move away from that coal fired economy which they know they’ve gotta do over time, they realise that if they just put all those measures on hold they’ll face a big bill in the future, so they're doing a lot of substantive work now, outside the ETS. If we think we can just put all our major policies on hold and do nothing then all we're doing is putting the bill on future generations.

STEPHEN Well let's just come back to our New Zealand position at the moment, it starts on July 1st, we know all the energy sector material is going in first, agriculture's another three years away also, John in terms of the signals you're seeing from the government do you think there are signs of nervousness particularly say like bringing agriculture in on the schedule timeframe?

JOHN Can I just make a couple of points. There is a great deal of nervousness and I would say to all New Zealanders who are concerned about this, contact their National Members of Parliament, contact Cabinet Ministers, because I've heard from several sources in recent days that several members of Cabinet are concerned, back bench lobby MPs are lobbying Cabinet Ministers, they're very concerned about the damage it's going to do to New Zealand and the damage there is to their re-election prospects. So absolutely those people lobbying continue to do that. Let me correct you on agriculture, the Minister and the Prime Minister are very good at saying agriculture's gonna come in in 2015, for the average dairy farmer, petrol, electricity, and the processing costs of dairy factors represent three quarters, three quarters, animal methane and nitrous oxide from fertilisers a quarter, they're delaying a quarter but the three quarters starts in July, or half of it starts in July, so let's be absolutely clear agriculture is paying, it's paying on the 1st of July with every other business and every other New Zealander.

STEPHEN One quick question. If ACT is so passionate about it, if it's got the backing of the sectors of the business community and you're in coalition with National why aren't you making any difference with the National government?

JOHN I believe we are.

STEPHEN Are you? How?

JOHN Well I believe we are, the mere fact that members of the National Party, are getting in contact with their local MPs and saying this is ridiculous, people are resigning from electorate committees, back bench MPs and junior ministers are very very much concerned, even senior ministers are concerned, because what you’ve got here is you’ve got a Prime Minister who's got an eye on the next election, and what's more important, the National Party being re-elected, or us imposing a tax on us, on our whole country, leading the world, leading the world, will be the first and only country to have such a comprehensive ETS.

STEPHEN And do you agree with that Kennedy, we are ahead of the pack now?

KENNEDY The Europeans have always been leading the world on climate change, they continue to lead the world on climate change, and as long as you don’t have a global treaty where we're all committed to, you're going to have jockeying for position, that’s the thing, and I respect the problems that John identifies, but with respect John Boscawen and ACT's position is based on a fundamental misunderstanding, that you can get and you can combat climate change which is a reality, by deferring the cost, the short term costs of a switch to a low carbon economy, you can't do that, the damage to the New Zealand economy will be far greater if we don’t make the switch now.

STEPHEN And Labour's singing on the same song sheet.

CHARLES Well the ways that you need to make the switch are important as well. When Labour was in office with the support of the Greens we enacted an ETS that was actually going to make much more of a difference to emissions than this one, but we also recognised that it would only make some of the difference. You had to find ways to get more efficient energy generation, you had to get transport emissions down, you had to do research on how to get those agricultural emissions down. All these are areas that have been cut by this National government, and that’s actually a very important part of this equation that we're ignoring, the Australians are spending a lot of money in these areas, we risk falling far behind.

STEPHEN But if the Labour scheme had been retained and the Australians had done what they’ve done in the last week Labour would be even more out on a limb in comparison to the rest of the international community would it not?

CHARLES Well in fact Labour would have been much more in tune with the international community because our emissions trading scheme recycled revenue to do all these other things that are absolutely vital to get emissions down, and all these policies have been scrapped by the National government, which is why the only reason our emissions looked last year like they might be reasonably under control is that we had a recession. You can't rely on a recession to keep your emissions under control long term.

STEPHEN Just a quick question. Do you think National will cave to the pressure that’s coming from ACT and some in the business community?

CHARLES I think probably the only reason that they're not caving is because they'd have to write a cheque to those foresters for a billion dollars.

JOHN That’s rubbish.

STEPHEN Well you're even advocating compensation for the foresters.

JOHN Well let's look at forests.

STEPHEN Briefly please.

JOHN Nick Smith said that he has to pay 1.1 billion dollars to people who planted forests post 1990. That’s rubbish cos his officials told me in my office on Thursday that more than a third of that relates to pre 1990 forests and is a key difference. Second point why would you pay compensation, why are we giving subsidies massive subsidies to farmers who planted trees in 1990, 91, 92, 93, 94, 95, before the Kyoto Treaty even came into being, let alone ratified by New Zealand. Well it's 20 million dollars at most, not a billion, 20 million at most.

CHARLES John has a point that the ETS is not well designed, the changes that the National Party made to it make it a non optimal scheme.

STEPHEN Right, Kennedy 10 seconds your final take.

KENNEDY It's too easy to get lost in the immediacy and the short term sectional interests, we've got to get our eye on the bigger issue, the broader picture, and what we need is a global carbon price, very very quickly.

STEPHEN Alright, fantastic, thank you for your time gentlemen, we've gotta move on.

ENDS

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