By Pattrick Smellie
The business lobby hates it, and so do climate change activists, but Federated Farmers – once the Emission’s Trading Scheme’s most strident critic – has proved one of the least incensed by the ETS review panel report, released yesterday.
Business New Zealand’s energy, environment and infrastructure manager John Carnegie says “we couldn’t be unhappier”, while the head of the Sustainability Council, Simon Terry, says “the ETS continues to market the aroma of change without actually delivering” and the review panel is only adding to the cost taxpayers will bear from the cost of international obligations to reduce greenhouse gas emissions.
But Federated Farmers vice-president William Rolleston congratulated the review panel for recognising agricultural emissions had fallen over the last 20 years per unit of production.
“Farmers will be extremely pleased” that Environment Minister Nick Smith has renewed the government’s pledge not to place farmers in the ETS if trading partners did not follow suit.
“The government is to be congratulated for this,” said Rolleston. “It is also congratulated for recognising that farmers, despite the research investment, lack the practical means to reduce emissions.”
The mild, politically supportive language contrasted dramatically with the statement released by Federated Farmers immediate past president, Don Nicolson – now a highly ranked ACT Party candidate – who said farmers have had a “gutful of ETS nonsense.”
“Farmers will be gutted by the white flags being flown by those they thought would be in their corner,” said Nicolson, whose take-no-prisoners rhetoric put the country’s main farming lobby offside with its traditional National Party patrons. He claimed the world was “moving past climate change” as an issue.
The review panel recommended that agriculture still enter the ETS in 2015, but only at a pace that reflected international progress on a replacement for the Kyoto Protocol, which expires next year, and the availability of practical technologies for reducing GHG’s produced by farm animals.
However, business interests were generally united in their concern that the pace of implementation for the ETS is still too fast, despite review panel recommendations to slow down the transition from an interim $12.50 per tonne ETS charge on GHG emissions to $25 a tonne.
The earliest that can happen is 2013, under current legislation, and the review promotes a three year phased path to $25 per tonne, through to 2015.
Both Business New Zealand and Fonterra remain worried that New Zealand businesses will be forced to be less competitive than global rivals which are largely not applied elsewhere in the world.
That could lead to dairy production shifting to “far less emission-efficient countries” with “no reduction in global emissions,” said Kelvin Wickham, Fonterra’s group director of supplier and external relations.
However, Associate Professor Ralph Chapman, director of the graduate programme in environmental studies at Victoria University said “the dramatic scale of the climate change problem facing us is not being turned into credible policy.”
While the review panel’s analysis was “reasonable”, it was also “over-cautious”, while the Sustainability Council’s Terry described New Zealand’s approach as “the eternal transition.”
“With each change to the ETS, the subsidy regime is expanded and the taxpayer picks up more of the tab, while there is minimal impact on gross emissions,” said Terry.
Green Party leader Russel Norman said New Zealand was “putting off until tomorrow the hard work that we need to do today.”
However, the minerals industry lobby Straterra urged the government to do its own analysis before accepting what it believes are “overly optimistic” assumptions about the rate of global progress on climate change action.
“Like the review panel, industry has also been able to assess first hand other countries’ actions, and there is very little to report,” said Straterra’s Chris Baker.
Carnegie said Business New Zealand was concerned “there is a disconnect between the recommendations concerning the price of carbon and their impact on New Zealand businesses and investment and jobs, and the reality of a pace of global action to price carbon into other economies.
“We'd prefer a longer term transition - say 10 years - with the ability for government to watch what happens internationally rather than simply accept international developments as a given, or indeed appropriate for NZ,” he said.
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