NZ Emissions Policy: Damning Regulatory Impact Report On ETS Bill
October 14th, 2009
Almost unnoticed in the fine print of the Emissions Trading amending legislation is the damning statement from the Treasury’s regulatory impact assessment team, which says simply that the analysis behind the new ETS “does not provide adequate basis for decision-making.” A Regulatory Impact Statement is now required of every piece of legislation, including an Adequacy Statement. It is only a few sentences in the explanatory notes to the Climate Change Response (Moderated Emissions Trading) Amendment Bill. The Bill is being pushed through Select Committee phases – Select Committee submissions are due today (Tuesday, Oct 13) and passage is required by Dec 7, after introduction late last month.
The four person Treasury team opens by saying it had little to go on: a limited regulatory impact analysis, “only a draft Cabinet paper” and “very limited time” for analysis. However, they did have long enough to conclude:
• “the level of analysis presented is not commensurate with the significance of the proposals;”
• “the Regulatory Impact Statement does not provide an adequate basis for decision-making;” and
• there are “major information gaps” in areas including harmonisation with the Australian ETS-equivalent, “including assessment of the implications of adopting allocation formulas designed specifically for the Australian economy;” the basis of the 50% by 2050 target, and whether the policy was likely to achieve stated policy objectives.
The RIS warns of the unexamined impact on NZ businesses, not only because recessionary conditions were harsh already, but also because it was unclear whether trade-exposed industries would “leak” to other countries with softer regimes, despite the policy instruments proposed to deal with that possibility.
Alarmingly, this Regulatory Impact Assesment Adequacy Statement is one of the shortest, most easily understood elements of the new Bill and its Explanatory Notes. Nowhere, however, is there any evidence that this report will make a jot of difference to the passage of a law which has become too important symbolically for NZ on the global stage not to pass into law in haste.
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