Obama commitment to emissions trading sends a clear signal to New Zealand to get on

A renewed strong commitment to introduce emissions trading by US President Barrack Obama sends New Zealand a signal to get on with implementing its own ETS scheme and securing the country’s trade and tourism.

In his speech to the Joint Session of Congress, President Obama specifically asked Congress to enact an emissions trading scheme in the US:

“But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.”

The statement affirms New Zealand’s major trading partners will be pricing emissions and running emissions trading (ETS) schemes, according to the New Zealand Business Council for Sustainable Development. The business leadership group’s 73 member companies’ annual sales of $59 billion equate to 43% of gross domestic product in dollar terms and employ more than 88,000 people. The Business Council backs emissions trading here as the least cost way of imposing carbon pricing – and encouraging investment in lower-carbon technology. The Business Council also supports transitional assistance to large emitters, facing possible competition from overseas companies not facing a carbon price, and other businesses and householders.

Business Council Chief Executive Peter Neilson says the European Union, from which the country earns more than $6 billion a year, already has an ETS and plans a more comprehensive one from 2013. Other major markets, like Australia and Japan, are also planning schemes. New Zealand exports to the US, EU, Australia and Japan are worth more than $22 billion a year. It means ETS schemes will operate in countries from which New Zealand earns more than half its total export revenue.

“It’s quite clear the world is moving to price carbon through emissions trading. We need to get ready for that, lower carbon emissions – and preserve and enhance our trading position,” Mr Neilson says. “There are large numbers of jobs to be had from investing in lower-carbon technology, from making clean electricity and fuels to planting new forests and improving agricultural practices. They will help cut our emissions bill – and help address the increasingly serious need to try to halt further global warming.

“The US and EU are also talking of imposing carbon taxes on imports from countries which don’t price carbon. The EU Parliament has also this month reaffirmed it will work on imposing carbon content labels on all products and services, including imports. That will also flow through the supply chain to every New Zealand firm producing something for that market, supplying to other countries making products or services for sale in the EU.

“Consistent with making sure we have fair transitional assistance for businesses and households, and remain flexible to adjust to the emissions-cutting plan the rest of the world decides will replace Kyoto from January, 2013, we need to get on. We need to get ready, send a price signal to redirect investment and also enjoy the sustainable new-job growth Obama plans for America,” Mr Neilson says.

“In the long term, emissions trading will in the longer term deliver more economic opportunities than fewer. Delay will simply put our trade more and risk, and put up the cost of adjusting later, while aggravating the threat to our quality of life.”