Hurry up report based on generalised assumptions

A report claiming big investment gains from quickly passing emissions trading legislation is based on generalised assumptions and some questionable logic, says Business NZ.

The report* claims NZ will gain $12 billion investment and 9,000 new jobs if the emissions trading bill is passed this year. However, that figure is based on assumptions from government departments rather than actual business plans or investment.

Business NZ Chief Executive Phil O’Reilly says it’s useful to try and forecast what might eventuate from such legislation, but it needs to be more than a finger in the air.

“Logic suggests that if we were to get so much investment as a result of passing the bill this year, then passing a better bill next year - having fixed the cost problems identified by actual businesses - would get us even more money.

“If anything, the report supports the case for taking the time to get the legislation right, rather than rushing it through.”

Mr O’Reilly said it was clear there would be opportunities arising from emissions trading, but it was hard to believe they would only arise if we passed the bill this year.

“It’s also hard to believe that if New Zealand – being the world-leader, with an all-gases, all-sectors scheme – had to delay its scheme a bit, that this would cause us the great loss in reputation claimed by the report.”

Mr O’Reilly said the figure of 9,000 new jobs was at odds with Infometrics research commissioned by the Government that said the introduction of emissions trading would result in the loss of 52,000 jobs.

He said there were other concerns with the report, including its claim that New Zealand companies will be disadvantaged by UK carbon labelling requirements if we don’t pass the bill this year. Mr O’Reilly pointed out that those requirements already provide an incentive for reducing carbon emissions, regardless of whether the bill is passed this year or not.

Mr O’Reilly said business would also be concerned at the report’s suggestion of a carbon charge on imports, since protectionism often sparked retaliatory measures.

“The report has quite a lot of small-print disclaimers and is based on qualitative research that took only seven days to complete - it should be viewed as a think-piece rather than quantitative research.”