Allocation issues important in emissions trading talks

Designing an emissions trading scheme which effectively reduces greenhouse gas emissions while being fair to industry is an important matter which requires careful consideration, Climate Change Minister David Parker says.

The issue at stake is how much free allocation of Kyoto units certain ‘at-risk’ businesses should receive under the scheme, and how quickly that allocation should be phased out.

Cement producers Holcim New Zealand have today expressed concerns about the impact of the design of the Emissions Trading Scheme legislation presently being considered by a select committee.

“The government is aware that large greenhouse gas emitters like Holcim New Zealand are worried about facing international competition from companies without climate change obligations,” David Parker said.

“They are correct that if these allocation arrangements are not properly designed, it raises the risk that heavy industry could move to countries without restrictions on greenhouse gas emissions.

“We’re considering those concerns through the select committee process and through the Climate Change Leadership Forum which has representation from business and environmental sectors,” David Parker said.

"Of course in considering issues such as levels of free allocation, we are also mindful of balancing the interests of taxpayers and workers - as well as firms - along with our desire to move to a lower carbon economy over time."