Global news: ETS distress

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In a move deplored by the Parliamentary Commissioner for the Environment and environmental NGOs the Emissions Trading Scheme (ETS) remains unchanged despite submissions.

According to the WWF, the amended ETS is 'another nail in the coffin for New Zealand's credibility on climate change'.

The Climate Change Response (Emissions Trading Scheme and Other Matters) Amendment Bill, which passed through the Finance and Expenditure Select Committee last week with no significant changes, sees the maintenance of the so-called 'transition phase', allowing the agricultural to escape punitive climate change reduction measures.

Under the Bill, emissions from agriculture will be deferred from the scheme pending a review in 2014, something that 59% of submitters disagreed upon. The Bill removes a specified entry date for the agricultural industry, which accounted for 47.1% of emissions in 2010.

The Bill remains unchanged despite a wide range of concerns raised by civil society groups, the forestry industry and opposition parties. Green Party, Labour Party and New Zealand First reports opposed the passage of the Bill.

Peter Hardstaff, climate change programme manager at WWF-NZ, says the ETS has been watered down since 2009. "And if that wasn't enough, it is being further diluted now. It will not stimulate the emissions reductions we need and will instead allow big polluters to pollute cheaply at the expense of the taxpayer."

"Even New Zealand's inadequate goal of a 50% emissions cut by 2050 is looking increasingly out of reach," he says. "We call on the government to re-think not only this Bill but its whole approach to climate policy, to make the essential transition towards a low carbon future as smooth as possible."

Parliamentary Commissioner for the Environment, Dr Jan Wright said that the returned Bill continues to subsidise big polluters and exempt agriculture from the legislation, issues she strongly advised against in a submission. "Climate change is the most important environmental issue we face but this isn't simply an environmental issue. We're heading into a carbon constrained future which means we need to move to a low-carbon economy if we are to compete internationally," she said.

Dr Wright says these measures are disheartening. "If these changes to the ETS are passed we'll be rewarding greenhouse gas emitters with public money and punishing sectors that have invested in greenhouse gas reduction such as forestry. For our environmental and economic good we need be investing in a low carbon future, instead we're being locked into promoting old, dirty, technologies.

The NBR reports that the Bill's decision to not cap the use of foreign credits means that key emitters have grabbed low cost carbon units selling for as little as $2 a tonne. When the ETS was introduced in 2009 carbon was selling for $25 a tonne as its maximum price, but the New Zealand Units, which are issued by the government, are only worth around $3 a tonne.

"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," says Forest Owners Association chief executive David Rhodes.

To read the proposed changes to the ETS click here and to view the summary of submissions click here.