Parties can't agree on Emissions Trading

Photo / Dean Purcell
Photo / Dean Purcell

With wildly differing views on whether an emissions trading scheme (ETS) was the right way for New Zealand to tackle climate change, what form it should take, or whether climate change even exists, it was always going to be a hard ask for political parties to agree.

In the end they could not.

Parliament's finance and expenditure select committee report on proposed changes to the existing ETS was released today.

Normally such reports suggest any amendments the committee collectively agrees on.

The parties involved seem only to have agreed that there was little time for them to consider the changes.

The committee's report said "time constraints" as well as the divergent views prevented them reaching an agreement.

National members on the committee said they agreed to some amendments, technical and material, recommended by officials.

The Government's support parties, Maori and ACT, were not so supportive.

ACT repeated its belief that it was "uncertain" human-caused global warming existed.

However, as there was an existing ETS they would support any new legislation to delay its commencement.

The process was too rushed. New Zealand should wait until after the international meeting in Copenhagen next month and until Australia and the United States finalised their schemes, ACT said.

A low carbon tax as an initial measure was its preferred option.

It said most New Zealanders did not "fully understand the costs and impositions" of the ETS or proposed changes.

The Maori Party preferred a carbon tax but said if the ETS was to go ahead it would need a comprehensive clause to deal with the Treaty of Waitangi.

The Government must ensure that Treaty settlements were respected no matter what changes were made, it said.

The existing ETS was passed under the previous Labour government. National campaigned on changes and introduced the Climate Change Response (Moderated Emissions Trading) Amendment Bill to make them.

On Thursday, Treasury told the committee the total additional cost to taxpayers of the changes, including government borrowing costs, would reach $100 billion by 2050.

Unsurprisingly, Labour's minority report today said the amendment bill should not proceed.

Labour believes it "significantly dilutes" the effectiveness of its ETS and would have a negative impact on New Zealand's economy and environment.

Labour was concerned the policy would not offer an incentive for reduced emissions, would transfer wealth from taxpayers to polluters and would increase the Government's fiscal risk.

It also said the select committee process had been "rushed and inadequate".

It did not want the entry of the agriculture sector into the scheme delayed nor the removal of a $1 billion household fund to promote reductions in non-transport household emissions.

Labour's report said it was willing to make some compromises.

The Green Party, whose preference is for a carbon tax, said while it opposed a carbon price cap it wanted a cap on intensity-based unit allocation and an earlier start to the phasing out of free allocations.

Linking New Zealand's ETS with Australia would "distort" the local market, linking with the European Union would be better, the Greens said.

They also believed the committee had been rushed and said the Government was now likely to introduce changes during the committee stage of the bill in Parliament.

That was undemocratic and would result in "serious errors", they said.

The bill was referred to the committee on September 24 and by October 13 it received 379 submissions and heard 128.

Its report back today confirmed it was unable to reach an agreement on whether the bill be passed or what amendments should have been made.


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