Chris Mole, Associate Editor

• Framework still may be amended.
• Business and farmers remain opposed.
• Is it really all about perception?

NZ is set to launch the first emissions trading market outside Europe and whoever wins the November election, the ETS is here to stay. National is committed to the concept of Emissions Trading but if it forms the next Govt, the ETS will face a host of amendments, with key industries and agriculture likely to get more time to reduce their emissions. Matthew Andrew, head of Minter Ellison’s climate change group, believes a National Govt might give the farm sector until 2018 to reduce emissions.

Andrew notes the agriculture sector is one of National’s main electoral power bases, so it will want to be careful not to alienate farmers. He also believes National might look at doing a post-election deal with the Maori Party to alleviate iwi concerns about the impact of the ETS on Maori forestry assets.

The NZ Business Council for Sustainable Development believes the framework of the ETS will probably remain unchanged whoever wins the election. CEO Peter Neilson notes once an emissions trading regime is in place, effectively the only questions are “how tight the cap is, and who gets the free allocations.” The ETS is expected to cost households about $3000 dollars a year by 2025, with the cost of power, petrol, dairy products and rubbish disposal all to rise. But Helen Clark argues the alternative, doing nothing, would be more costly in the long run, because of the impact on NZ’s clean and green reputation. Clark notes if NZ does not take a lead in dealing with climate change, it risks being boycotted as a “dirty producer” by world consumers and tourists who are increasingly environmentally conscious.

This fear of what overseas consumers might think of NZ is also the main reason National supports emissions trading, when many of its MPs are privately sceptical about human-induced climate change. The ETS is still bitterly opposed by most of NZ’s business sectors, especially farmers, whose animals are responsible for nearly half the country’s emissions. Federated Farmers President Don Nicolson says the ETS will “create a mess” for agriculture. He claims the legislation is ill-thought through, rushed and has huge risks for the NZ economy and the nation.

The Green Party has welcomed the passing of the ETS as the first small step towards getting NZ’s carbon emissions under control but adds there is still much work to be done. Co-Leader Jeanette Fitzsimons says the Greens favour a range of additional measures, including a commitment to “zero-energy” buildings, which are not only super efficient in their energy use, but also feed energy into the grid. The Greens also want more research and development into new green technologies, particularly ways to reduce methane and nitrous oxide emissions in agriculture.

 Copyright © Media Information Ltd
NZ Energy & Environment Business Week