ETS changes reasonable

The Government has taken a reasonably balanced approach to carbon pricing in its amendments to the emissions trading scheme announced today, says BusinessNZ.

The amendments arising from the latest review of the scheme will see price protections extended beyond 2015.

The protections – companies having to surrender carbon units for only half the carbon they emit, and a cap of $25 per tonne in the price of emissions – recognise the fact that New Zealand is ahead of most of the world in accepting a price on carbon.

BusinessNZ Chief Executive Phil O’Reilly says the changes will maintain incentives for emissions reduction while shoring up New Zealand companies’ ability to compete against companies in other countries.

“The move recognises the financial constraints not only on businesses but also on consumers.  It guards against increases in the price of electricity and fuel that would otherwise occur because of an unequal international playing field.

“This is not a softening of the ETS.  The changes announced today will not reduce the costs currently faced by New Zealand business and consumers.

“We should remember that the current cost of carbon, although relatively low, is still more than is being faced by our trade competitors, and will doubtless increase as the global economy recovers.

“While these amendments do not make the environment harder for business, neither do they make it easier.  Moreover the frequent reviewing of the scheme’s design also loads uncertainty costs onto New Zealand business.

“It would be preferable if the settings announced were today kept in place for a reasonable amount of time – at least until 2020 - to allow New Zealand businesses to make a success of our bold national stance on emissions reduction.”