ETS not needed to meet Kyoto obligations

The Emissions Trading Scheme (ETS) should either be scrapped or substantially amended, the Select Committee reviewing the ETS has been told today by Federated Farmers.

“The road to economic hell will be paved by an ill conceived ETS, because New Zealand doesn’t need the ETS to meet its Kyoto obligations,” said Don Nicolson, President of Federated Farmers.

Federated Farmers favours repeal of the ETS and non-punitive policy measures to transition New Zealand to a low-carbon economy. The Federation’s interim solutions put to the Select Committee include:

· New Government-funded forest plantings via land leasing regimes, land purchases or other viable partnership arrangements. This will not just develop new permanent forestry sinks but also generate employment opportunities. This concept was also put to the Prime Minister’s Job Summit held earlier in the year;
· A low-level carbon charge set at a rate that recovers just enough revenue to account for any emissions deficit;
· Government purchasing the cheapest Kyoto emissions units available to meet New Zealand’s future liabilities, until the Kyoto Protocol lapses in 2012;
· Lead internationally by advocating for each country to allocate a percentage of GDP towards climate change initiatives; and potentially,
· Non-compliance, akin to the Canadian Government’s approach since 2005.

The second option put forward by the Federation was a substantial rewrite of the Climate Change Response (Emissions Trading) Amendment Act. This would exclude primary food production and introduce economic tests to balance out the current punitive nature.

“The primary production of food has no place in any emissions trading scheme,” Mr Nicolson continued.

“Precedent for this comes from Denmark. The Danish Government in March moved to specifically exclude the primary production of food from its Kyoto response.

“The inclusion of primary production shows how New Zealand entered Kyoto eyes wide shut. At no stage was any question asked about the financial impacts New Zealand faced from honouring the commitments business was signed up to.

“The Danish Government correctly deduced there was no point in sacrificing its farmers when less efficient countries would only produce more. The Danes saw little point in sacrificing a vital export industry either. In Denmark, agriculture accounts for around 19 percent of all exports but in New Zealand, agriculture represents 64 percent of everything we sell to the rest of the world.

“This highlights just how economically serious this issue is for every New Zealander.

“The fact New Zealand swung from a $546 million liability to a $241 million surplus in one year illustrates just how ropy Kyoto accounting is.

“Some members of the select committee may accuse Federated Farmers of being alarmist and looking for state subsidies.

“We would counter that Kyoto is widely seen as imperfect. Science over the last 20-years shows that agriculture actually forms part of the solution and not the problem.

“With deference to some of its backers, the ETS is world famous only in the minds of some politicians and environmental lobbyists.

“Climate change solutions do not begin and end with New Zealand as 99.8 percent of all global emissions occur outside of New Zealand.

“Every single human being, car, business and farm animal in New Zealand could be evacuated to Australia tomorrow, yet that sacrifice would not make one jot of difference to global emissions. Not one.

“Look at Canada. While the Federation views international commitments seriously, it walked away from its Kyoto commitments in 2007 but the world still trades with Canada and Canada hasn’t become a pariah state some claim New Zealand would become.

“The Federation also asked why increasing agricultural emissions from New Zealand was being viewed so negatively.

“New Zealand agriculture supposedly produces 0.1 percent of global emissions but we produce enough food to feed over one percent of the world’s population. That’s an efficiency ratio of at least 10:1 or much higher, if calorific output is counted.

“It demonstrates that New Zealand’s farmers are world beaters and must not be beaten up upon,” Mr Nicolson concluded.