ETS process a rubber stamping exercise

The Climate Change Response Amendment Bill reported back from the Finance and Expenditure select committee today is largely unchanged from the original, proving the truncated process to be nothing more than a rubber stamping exercise, Labour's Climate Change spokesperson Moana Mackey says.

"Instead of the usual four to six months’ timeframe for the submission process and detailed consideration of content, this highly technical Bill received only seven weeks.

"Worryingly, the long term fiscal projections for the Emissions Trading Scheme (ETS) provided to the select committee were based on existing legislation and had not even been updated to reflect the impact of the changes being introduced in this Bill.

"The Bill goes against the recommendations of the ETS review panel and locks in ‘transitional provisions’ permanently. Given the cost of extending these provisions and a current carbon price of $3 it is hard to see how the Government can justify the unending continuation of these subsidies.

“The Bill also permanently excludes agriculture, which produces 48% of our gross emissions, from the ETS.  New Zealand’s ETS was designed to be an ‘all-sectors all-gases” scheme. Without the inclusion of the agricultural sector it simply cannot function as intended.

“Of particular concern is the impact this legislation will have on the carbon forestry sector. Instead of supporting it, the Bill delivers a double whammy - by simultaneously locking in subsidies and exemptions thereby reducing the demand for forestry credits, whilst at the same time doing nothing to restrict the flood of cheap international units into New Zealand.

“The implications for the forestry sector are catastrophic, and the wider effect will be to have no effective price on carbon at all, despite that being the central reason for having an ETS in the first place.

““The Minister could simply keep the commitment he made in April by following the example of other countries such as Australia and requiring a percentage of units surrendered in New Zealand to be domestically sourced (NZUs).

“The Government has refused to do that in order to ’protect businesses and households’ from the cost of carbon during recessionary times. However there is absolutely no evidence to suggest that the benefits of these policies are in fact being passed on to consumers.

“As the Parliamentary Commissioner for the Environment notes: ‘The ETS is the main system New Zealand has for reducing our greenhouse gas emissions. Hollowing it out like this makes a farce of our climate change commitments.’

“This Bill is the final death blow for New Zealand’s ETS,” Moana Mackey said.