Latest figures show why emissions trading should proceed quickly

The latest figures on New Zealand’s net position under the Kyoto Protocol shows why an emissions trading scheme is a good idea.

The New Zealand Business Council for Sustainable Development – whose 73 member companies’ annual sales of $59 billion equate to about 43% of GDP in dollar terms – says one-off factors can make annual revisions bounce around a lot.

“The key message is that we need to reduce our emissions from current levels and putting a price on carbon through an emissions trading scheme (ETS) is the best way to achieve that,” Business Council Chief Executive Peter Neilson said today.

One-off factors, like the drought, or trend assumptions like a long recession, can affect the figures greatly.

Mr Neilson says two very welcome, and telling, developments are buried within the latest calculations.

First, the forestry sector, now in the emissions trading scheme, has made a net contribution to New Zealand’s improving position. Foresters are responding to the signals that the ETS sends by taking the cost of carbon into account when deciding when and whether to deforest their land.

“The Business Council hopes that soon all New Zealanders will have the same price signals sent to them by a comprehensive ETS, which makes sure people take the environmental implications of their actions into account.”

Second, agriculture has almost made a positive contribution. The 7.3% reduction in projected emissions from this important sector show that farmers can and will take positive steps to reduce emissions when it is in their interests to do so. The new figures include for the first time the positive impact that nitrogen inhibitors can have on our emissions.

Projected agriculture emissions for 2008-2012 are now 14.4 million tonnes lower than projected in 2008. Of this, 4.1 million tonnes was due to the development of a New Zealand specific emission factor for nitrous oxide emissions from dung and urine, and the incorporation of a nitrification inhibitor, dicyandiamide (DCD).

“We hope the Government will take the good news from these figures and move quickly to finalise its review of the ETS”, Mr Neilson says. “We now have even more evidence to show that getting price signals right and then letting kiwis do what they do best – getting on with business – is the right way to go. Delay in pricing carbon will put up the cost of bringing them down later. Delay is also causing planning blight. Investment decisions are being stalled on projects which require a price on carbon or would not be viable with a high carbon price. We need clarity quickly to trigger investment and jobs.

“Every bit of evidence the country has is that New Zealand agriculture can deliver products into offshore markets with the lowest carbon content. If the world puts a price on carbon, New Zealand will compete superbly. We should be pressing for that on the world stage, and getting on with price incentives at home to lower emissions further.”