Smith tells meeting ETS a first step

Nick Smith addresses the ETS meeting in Wellington on Wednesday night. Photo / Mark Mitchell

New Zealand woke up this morning to a world where it will cost money to burn fossil fuels - effectively $12.50 per tonne of CO2 produced or about $165 a year for the average family.

Last night Climate Change Minister Nick Smith said it had cost the taxpayer at least $100 million simply to get to this point.

That was his office's best guess at what's been spent paying officials to write 50 reports, run 12 rounds of public consultation and eight separate select committee hearings to test different policy options for New Zealand's response to its Kyoto Protocol commitments.

Dr Smith is halfway through a series of public meetings throughout the country he is holding to explain the resulting emissions trading scheme (ETS) that came into effect today, and spoke in Wellington to an audience of about 120.

Dr Smith has clearly addressed many public hall meetings in his time and was congratulated afterwards by beneficiary advocate John Field on "a good election speech".

But he'd failed to win over another man who chose not to identify himself other than to say he "spoke for the superannuitants" who would be worse off under the ETS.

"The coercive power of Government is being used on people who are actually ignorant of the subject itself and feel resigned to the fact that we can do nothing because for political reasons you say we have to do this."

But while Dr Smith freely acknowledged the politics around the ETS he didn't accept the scheme was being introduced for political reasons.

"We are doing it for environmental reasons. We need to constrain the degree to which we are changing the chemical composition of the atmosphere by burning fossil fuels."

Addressing the man's question around the impact of the scheme on beneficiaries, Dr Smith said that would be offset by inflation based benefit adjustments next year.

Also going to bat for the elderly last night was Molly Melhuish - an energy analyst and board member of Grey Power who knows the electricity industry well.

She pointed to the windfall profits state-owned power companies are expected to make because of the scheme and asked why a portion of what may be as much as half a billion a year couldn't be used to help cushion the impact on the most vulnerable.

Dr Smith began with familiar assurances - the Government would keep a "watching brief" on the power companies; it was already helping insulate homes; people should shop around for the best power prices.

But he was cut off by Mrs Melhuish, who told him that was not enough and appeared to realise he was on a hiding to nothing.

"If your challenge for me Molly is we need to do some more in that space, message registered."

The nature of other questions from the audience was consistent with what Dr Smith said he'd found on his tour so far.

"Most young people want me to focus on climate change because they're nervous about what the impacts are going to be during their lifetimes, most older people are concerned about the cost today."

Questions around why the Government wasn't going faster included one from a Greenpeace member who wanted to know why agriculture, which accounts for half our emissions, wasn't in the scheme today.

But while the livestock and fertiliser emissions are not part of today's scheme, Dr Smith said farmers, who burn about four times the transport fuel and 10 times the electricity of the average family, were not getting a free ride.

Asked why about 250 businesses will be getting big breaks under the scheme, he said every other ETS scheme had support for trade exposed businesses which would otherwise move offshore at cost of thousands of jobs.

"Its an uncomfortable dilemma but it is the reality of trying to make an emissions trading scheme that will work."

It was, he admitted, far from perfect.

"I'm not going to say to anyone in this audience that 3c a litre on petrol and 5 per cent on power is going to save the planet, it is not true."

It was, however, a first step.

Dr Smith's aspirations as Climate Change Minister are modest compared with what is probably required for a meaningful effect on global warming but sounded ambitious in Wellington last night.

"Quite frankly, if I only achieve a stop in the growth of New Zealand's greenhouse gas emissions, I'll retire a happy man."