Hodgson questions Kyoto report

Pete Hodgson

A report on the Kyoto Protocol's economic costs focused a little too much on what should not happen, rather than on what should be done, caretaker Climate Change Minister Pete Hodgson said yesterday.

But he said the report by economist Alex Sundakov for the Greenhouse Policy Coalition was a welcome contribution to the debate on climate change policy.

"In calling for action to be taken, albeit later rather than sooner, they are admitting that climate change is real and that something needs to be done about it," Hodgson said.

The report - commissioned on behalf of large industrial emitters of the gases blamed for greenhouse warming - said New Zealand would not be able to meet its Kyoto targets for emissions without major and futile damage to the economy.

Hodgson said: "I question the report's assertion that price has no effect on demand.

"For instance, the report argues demand for big cars will continue to grow and that high oil prices do nothing to reduce demand. But year-on-year sales to September of large SUVs [sports utility vehicles] in the United States are down 43 per cent while sales of the Toyota Prius hybrid are up 90 per cent."

Business NZ chief executive Phil O'Reilly said few Kyoto countries would be able to meet their targets. "It seems the only countries meeting the targets will be those Eastern Bloc countries whose economies have declined after 1990, leaving them with huge carbon credits but little industry."