Rushed Emissions Trading Scheme Legislation Under Fire From All Sides
September 3rd, 2008
• Bill put together too quickly
• Greens under fire for their support
• Farmers want more protection
The Govt is on track to pass its Emissions Trading Scheme Bill, probably next week, despite mounting criticism on the flaws within the legislation. One of the criticisms is aimed at the concession made by the Govt at the request of NZ First to grant a new free allocation of units for the fishing sector, which is equal to 50% of the impact of fuel costs for a three-year period. Critics are asking why the fishing industry gets such an advantage, and are linking it to allegations NZ First have earlier done favours for the fishing industry.
The Greens have come under fire for supporting the fishing industry concession, but have justified their support by saying it is the only trade-exposed sector which under the Bill as drafted would not have got free units. However critics point out farming is just as trade-exposed as the fishing sector, as too are many other companies. Greens Co-Leader Jeanette Fitzsimons says the reason the fishing industry did not initially get any free units is its energy source is diesel which as transport fuel doesn’t generally qualify for free units.
Federated Farmers says the ETS is too important for the legislation to be rushed through Parliament. “NZ Farmers are world leaders. It would be a disaster or this to be seriously threatened.” Business NZ says the design of the ETS tangles it with a social welfare scheme. The latest form of the legislation also introduces requirements for the agriculture and industry plans to be scrutinised by select committees and Parliament. This risks politicising the allocation process, when what business needs is certainty around allocation. Catherine Beard of the Greenhouse Policy Coalition says the rushed emissions law will cost Kiwis dearly. She says the “game-on” emails are already flying around the carbon market brokers.
To get the support of the Greens and NZ First, the Govt agreed to a one-off electricity rebate for all NZ households, as well as a cash payment or those receiving NZ Superannuation, Working for Families tax credits and benefits when the electricity sector enters the scheme in 2010. But this compensation will not cover secondary effects of the upward movement of electricity prices in the later years. The Greens also won a $1bn energy efficiency fund to improve household investment in insulation and more efficient heating. They also successfully argued the UN Kyoto units which were going to keep the price of carbon affordable (AAUs of which there are a surplus due to the collapse of Eastern European and Russian economies after 1990) should not be allowed to be purchased by NZ companies unless they had been “greened” first.
The most difficult political issue arising from the ETS legislation for the Govt may come from Maori interests. The Federation of Maori Authorities reckons the Bill if enacted will mean a loss in value of Maori-owned forestry land of up to $2bn, which will require to be compensated under treaty settlement conditions.
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