Business welcomes emisisons scheme delay

Reaction to the Government's announcement yesterday to postpone key stages of the emissions trading scheme.

Delays to parts of the emissions trading scheme (ETS) mean farmers will not have to buy carbon credits to offset livestock and pasture emissions until at least 2015, and the two for one carbon credit scheme for emitters will remain in place instead of ending this year.

BusinessNZ

BusinessNZ described the Government's changes as a "reasonably balanced approach" to carbon pricing.

The move was recognition of the financial constraints on businesses and consumers, said chief executive Phil O'Reilly.

It guarded against increases in electricity and fuel prices that would otherwise occur because of an unequal international playing field.

"This is not a softening of the ETS. The changes announced today will not reduce the costs currently faced by New Zealand business and consumers.

"We should remember that the current cost of carbon, although relatively low, is still more than is being faced by our trade competitors, and will doubtless increase as the global economy recovers."

Green Party

The Green Party hit out at the amendments, saying that continuing to exclude agriculture from the ETS would put our clean, green brand at risk.

It would also delay the adoption of clean technology and pass the cost of pollution on to taxpayers, said co-leader Metiria Turei.

"New Zealand is missing the chance to protect and enhance its $20 billion clean, green brand.

"Consumers in our export markets are becoming increasingly concerned about the carbon emissions tied up in the products they consume."

As a major agricultural producer, New Zealand needed to prove it was taking a proactive approach to reducing the carbon intensity of our exports, Turei said.

Forest Owners Association

Forest owners said the Government appeared to be unconcerned about "the tide of European carbon credits flooding onto the New Zealand market".

Yesterday's announcement would not stimulate the new carbon-absorbing forestry planting the country needed, said Forest Owners Association chief executive David Rhodes.

"The government is making sure the carbon price doesn't get too high, in order to protect jobs and exports at a time of global economic turmoil.

"But what about those who invest in low carbon technologies or plant carbon forests? They need protection from the price getting too low."

Rhodes said New Zealand needed to follow the lead of Australia and the EU by controlling both the supply and demand for carbon credits through auctioning or other mechanisms.

"We are confident the Government recognises the importance of forestry in offsetting national emissions.

"But we do not believe the NZETS in the form in which it exists is likely to deliver new forest investment, even taking into account the changes announced today."

Federated Farmers

The ETS was "the harshest treatment of any agricultural production system on earth", said Federated Farmers.

This delay was a result of the Government's realisation that tougher measures would hurt not just agriculture but the wider economy, said William Rolleston, Federated Farmers vice-president and climate change spokesperson.

"In a world preoccupied with the survival of their economies and with food security, there is no point in trying to lead where others will not follow.

"Unlike other countries where agriculture is given special treatment, farmers here, just like every other business and family, pay the ETS on the fuel and energy we use."

This impacts both a farm's bottom line and the cost of turning what farmers produce into finished goods for export, he said.

While biological emissions accounted for about 47 per cent of New Zealand's emissions profile, they also represented 68.1 per cent of our merchandise exports and 100 per cent of the food we eat, Rolleston said.

"New Zealand is able to not only feed itself, but produces enough food to feed populations equivalent of Sri Lanka.

"In a world of increasing food deficit, our hope is for Opposition parties to realise being a carbon efficient food exporter is global leadership."

ExportNZ

The Government's announcement was a welcome move from the perspective of exporters.

"The major concern we had was that unless the current moderating features of the scheme were maintained, our exporters would become less competitive in international markets against companies that were not facing similar emissions costs," said ExportNZ executive director Catherine Beard.

Continuing the 'one for two' obligation and maintaining the $25 fixed price of carbon would give trade-exposed companies some comfort they would remain internationally competitive into the future, Beard said.