Government Uses Maori Party To Get New Deal On Climate Change
September 16th, 2009
• Watered-down ETS a credible start.
• Treaty assets detail undecided.
• Deal hands Labour a political weapon.
John Key and his Climate Change Minister Nick Smith have delivered a credible, if weak, first step towards NZ reducing its greenhouse gas emissions, in a deal stitched up with the Maori Party which has yet to have the details hammered down, and which has left Labour seething. The new deal: acknowledges heavy industry concerns by moving to an intensity-based method for free allocation of emissions units without a cap, so industries can grow, increase their emissions and not face an additional cost of carbon, at least in the short term. Smith indicates a cap could come back on the table when the ETS comes up for its first formal review in 2011. And there is populist politics in halving of the impact of the ETS on households between now and when the Second Commitment Period kicks in on 1 January, 2013. Power and petrol price rises will be half what they would have been under Labour’s ETS, although Key may rue effectively giving power companies carte blanche to raise their tariffs by at least 5%.
It also threatens to create a new property right – Treaty settlement assets – which can be subject to renegotiation in the event of a major change in Govt policy. Labour rejected such a deal with the Maori Party last year, believing it would lead to Treaty settlements never being final. In this sense, the Maori Party deal looks a lot less about protecting the environment than iwi economic interest, given the key concessions involve Maori forest assets and fishing industry transitional costs, where Maori investment is large. The new 1 July 2010 entry date will be a scramble for stationary energy, industrial processes and liquid fuels, and 1 January 2011 may yet merge as a more realistic timeframe.
However, while the deal with the Maori Party on the ETS has almost certainly ensured the Govt will meet its deadline of new law before Christmas and the global climate change talks in Copenhagen, significant risks still remain as Maori expectations of a favourable deal for Treaty settlement forests have yet to be fully teased out. The Maori Party is highly sensitive to accusations of being pushed around by National, and if it cannot get the deal it thinks is available on central North Island and Ngai Tahu forests, it could yet cut up rough and threaten the Parliamentary process. The deal confirms an intensity-based approach to the free allocation of carbon credits to major emitting industries without, at this stage, any cap on total allowable emissions before an industry is exposed to carbon prices. This remains the critical difference between National and Labour on how the ETS should operate.
Labour’s climate change spokesman Charles Chauvel says the opportunity for a cross-party resolution to the ETS issue has been lost. Environmental Defence Society Chair Gary Taylor says “the revised ETS postpones when sectors take on obligations and extends the period of taxpayer support for industry all the way through to 2050. This makes business into welfare dependents with taxpayers paying the bill for the first half of this century.”
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