Chris Mole - Associate Editor

• Key says process should not be rushed.
• National supports ETS in principle.
• Parker - Nat’s stance to cost taxpayers.

Business and farming lobby groups are breathing easier after National’s decision not to support the Govt’s Emissions Trading Scheme. Labour is putting a brave spin on National’s capitulation. But the reality is, it now faces an uphill battle to pull together enough support from minor parties to get the legislation through before the end of this Parliamentary term. In backing away from the Bill, John Key has acknowledged the enormous economic complexities involved in what would be a major revamp of the tax system. He argues the process should not be rushed. But he promises if National wins the election, it will put emissions trading at the top of its agenda in the new Parliamentary term.

Key is essentially reiterating the view of virtually every business lobby group which has appeared before the Select Committee, saying they are in favour of emissions trading in principle but more time is needed to work through the details. He notes there are still many unanswered questions about the legislation. For example, there has been no clear analysis of exactly how much the Scheme will reduce emissions. National believes NZ should not try to be a world leader on climate change because “Kiwis simply can’t afford to pay the price for that particular experiment.” Key also argues the ETS should be fiscally neutral rather than providing “billions of dollars in windfall gains” to the Govt. And he wants the ETS to be as closely aligned as possible with the planned Australian scheme.

Helen Clark says Labour was never relying on National’s support for the ETS and will continue with cross-party talks to try and get it passed. With the Greens ironically threatening to pull their support because they see the proposed Scheme as too soft, and Peter Dunne distancing United Future from the legislation, Labour is looking to NZ First and the Maori Party. But both those parties are also wavering in their support. Climate Change Minister David Parker warns any delay in introducing an ETS will cost taxpayers at least $200m in the first 18 months of Kyoto because NZ’s emissions will increase and deforestation will race ahead. Parker describes National’s stance on the ETS as “pathetic.” He claims the scheme is well designed, and in line with similar schemes either in place or under development around the world, adding “there is no fundamental flaw National can point to.”

The Green party has also registered its disgust at National’s stance, with Co-Leader Jeanette Fitzsimons describing Key’s approach to climate change policy as having “all the urgency of a methane-emitting cow chewing its cud.” Realistically, if the ETS is not passed by this Parliament, National is likely to be busy with many competing issues if it forms the next Govt, so it’s hard to see any emissions trading scheme coming in before 2010.

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