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Home / Business / Companies / Energy

<i>Paula Oliver</i>: Politicians feel the pressure as costs hit public just when household budgets are stretched

By Paula Oliver
NZ Herald·
1 May, 2008 05:00 PM3 mins to read

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Opinion by

KEY POINTS:

Politicians are beginning to really feel the heat over the looming emissions trading scheme and it is now inevitable there will be changes to the legislation.

Put simply, timing is virtually everything.

When Prime Minister Helen Clark first said she wanted the country to be "carbon neutral" in
October 2006 it all sounded so good.

In the following months businesses jumped on the bandwagon and branded themselves green, while ministers talked enthusiastically of a future with electric cars and hills pocked with windmills.

But now it all sounds so different.

Suddenly the costs of the emissions trading scheme are starting to sink into public minds.

And, unfortunately for Labour, it's happening at a time when other factors such as rising food prices, oil prices and high mortgage rates are hitting households where it hurts.

New Zealanders may well have more of an appreciation of the environment than their counterparts in lots of other countries.

But when household budgets are really stretched, the fear in the political corridors of Wellington is that the public could begin to really question the wisdom of further petrol or electricity price rises to combat global warming. In an election year that is a dangerous scenario for any politician.

It now appears likely there will be a delay to some parts of the scheme - such as higher petrol costs scheduled for January 1 next year - to smooth the transition.

This is because the threat of a backlash is not only being felt by Labour, but it's also being felt by National and probably all of Parliament's smaller parties except the Greens.

Getting the emissions trading legislation through Parliament is a numbers game at the end of the day and Labour needs help to do it.

If parties like New Zealand First waver then Labour will need to look in the direction of the Maori Party or National to help get its legislation through.

Let's face it - it's hard to imagine Winston Peters dying in a ditch over an emissions trading scheme. However, he could potentially be convinced to back it as long as he can get some concessions that don't hurt people's pockets as much as the current legislation might.

National, for its part, is holding firm on its line that an emissions trading scheme is the best way to tackle climate change.

But the party's leadership is sounding more and more like it is building up to an announcement shortly that it would delay the introduction of the scheme.

Even if Labour wanted to proceed with emissions trading - the major plank of its "sustainability" push - without any changes, it probably wouldn't be able to.

Add to that the fact Helen Clark has a pragmatic streak born of experience, and it becomes easy to see why the legislation is heading for change.

There will be a scheme. And eventually someone is going to have to wear the cost of meeting our obligations under the Kyoto Protocol.

But the politics of the situation mean it just might not happen as soon as we originally thought.

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