Changes to ETS needed to reduce costs

Parliament needs to pass amendments to the existing Emissions Trading Scheme prior to Christmas to make it workable and affordable, Minister for Climate Change Issues Nick Smith says.


"It is no surprise the Finance and Expenditure Committee was equally split over the amending Bill given the entrenched positions of the Greens, Labour and ACT. It is disappointing that opposition parties are so intransigent that they would not even support technical amendments to improve the Bill such as the matter of tree weeds. The issue of climate change deserves better than this pure oppositional stance.


"I acknowledge the timetable for passing this Bill is demanding but more than $400 million per year will be imposed on consumers and businesses from 1 January 2010 - including a 10% rise in power prices - if this Bill is not passed by Christmas. The existing law also has many errors in it that need correcting for our ETS to work.


"Claims by Labour and the Greens of billions of dollars of extra taxpayer cost are not credible. There is no dispute about the costs to taxpayers of the scheme for the first decade where the amendments will slightly reduce the costs to Government.


"Figures beyond the first decade are highly speculative and dependant on assumptions about future international agreements, the carbon price and the growth of industry. It is true that Labour's scheme would make billions of dollars post-2018 as a consequence of the very aggressive phase-out of industry support and that the more modest abatement rate in the Bill that is in line with our trading partners means the taxpayer profits less.


"The changes do not mean the Government is subsidising important industries such as agriculture but rather the Government is receiving $2 billion less per year in profit from the ETS from the period beyond 2030.


"The Government is revising the ETS to reduce the costs to households and the impact on jobs while ensuring New Zealand takes a responsible approach to the global problem of greenhouse gas pollution and climate change.


"We will be working hard to ensure these improvements are passed by the time of the Copenhagen climate change conference next month and before the existing ETS comes into effect on 1 January next year."