May 11, 2008

Emissions Trading Scheme: Shifting Timeframes Not The Solution

Wet, cold, windy Sundays are great for catch-ups. We have been devoting time today to reading some of last week's submissions on the Government's emissions trading scheme blunder. Do readers recall our prediction earlier in the year that this was so bad that it would lose Labour the election? It is a great shame Labour did not take us seriously at the time, because at The Hive we are non-partisan and we believe in competition. Presently there is none.

Anyway the Fonterra submission is well worth a read and will stimulate two posts - this and the next one.

Now there is a view out there that thanks to the Government moving the timelines a bit that concern about the proposed EMS are reduced. We have welcomed the extra time but continue to argue that this is just a quick fix, that the scheme is still poorly designed, and that rather than relax we need to do the work necessary to have a workable scheme up and running so that we can meet our commitments under the next UN commitment period (a carbon tax or Government writing a cheque on behalf of all tax payers is the only solution to the liability in the first commitment period).

It was there for wonderful to read Andreww Ferrier's statement to the select committee

Mr Ferrier acknowledged the Government's decision to extend the timeframes for allocated credit support to trade exposed businesses, such as agriculture, was constructive. This will allow New Zealand more time to see what emissions constraints other competing markets may introduce.
But he added that shifting out the timeframes did not change the inherent problems in the principles of the scheme.
"Farmers and Fonterra will start paying the costs of energy and transport emissions at the same time as everyone else. We're happy to do so because we have the ability to reduce these emissions, and we have been since Fonterra's inception."
"But, along with the rest of the world we're still a long way off finding a way to reduce the methane emitted from animals. Without this solution, the industry can not reduce animal emissions on the farm. It makes sense that we only include these gases in the scheme when we have the ability to reduce them."
"The New Zealand agricultural industry is leading the way in this research and Fonterra is driving it with a considerable investment. We will not be taking our foot off the pedal."