ETS Set To Pass But Critics Fight To Bitter End
September 10th, 2008
The Govt’s ETS legislation, arguably the biggest economic reform since the 1980s, looks set to be passed by Parliament this week but not without a last-ditch fight by its opponents to stop it. The Scheme was under heavy crossfire last week from business, the Federation of Maori Authorities, Opposition parties in Parliament, and even one of the Govt’s support parties United Future.
Peter Dunne has called for the Bill to be deferred for six months. He says there is no need to ram it through Parliament and it should be dealt with “in a calm and rational manner.” Govt officials are scrambling to correct errors found in the ETS legislation last week, relating to co-generation and emissions from gas and coal purchased through wholesalers.
National’s Nick Smith says these latest errors are a blow to Minister David Parker’s credibility, as he gave assurances the Bill was “all fixed” after hundreds of last-minute changes at Select Committee. Smith argues it is “grossly irresponsible” to be ramming the Bill through with 785 new amendments, when the public has had no opportunity to comment, and when “not a single MP can credibly claim to understand it.” National is to seek support in Parliament to send the Bill back to Select Committee so the errors can be corrected. Climate Change Minister David Parker says the Bill has been through an exhaustive Select Committee and it has been worked through in great detail. Most of the amendments are technical.
During last week’s Parliamentary debate, several National MPs warned of dire consequences for agriculture, but Green Party co-leader Jeanette Fitzsimons who wants the sector brought in before 2013, says it is being rewarded with free credits until 2019, “extremely generous treatment.” Parker still insists there is no evidence the scheme will have an adverse impact on agriculture. Meanwhile, the Greens have won a last minute-concession for the Govt, which means NZ companies will not be able to buy the cheapest Kyoto units (Assigned Amount Units or AAUs) unless the units have been “greened” first.
This has incensed the Greenhouse Policy Coalition, which says it will significantly increase the cost of the ETS for all energy users. Executive Director Catherine Beard says AAUs are typically sold by Eastern European countries and Russia, which earned the units due to large emission reductions which came about due to the collapse of their economies and closure of old and inefficient plant after 1990. While these AAUs are recognised by the UN as genuine emission reductions, environmental groups frown on them. The greening of AAUs requires the country selling them to put the revenue towards projects that will reduce emissions. Beard says this is laudable but as yet there is no information on which Eastern European countries the Govt will accept units from. “We estimate with this change, emissions units will be now cost between $40-50/tonne, which is a far cry from the $15/tonne claimed by Minister Parker when the proposal for an ETS was first launched in September last year.”
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