May 2, 2008

Major Changes Likely To Emissions Trading Scheme

Paula Oliver writes an interesting article in today's NZ Herald

Politicians are beginning to really feel the heat over the looming emissions trading scheme and it is now inevitable there will be changes to the legislation.

Put simply, timing is virtually everything.

When Prime Minister Helen Clark first said she wanted the country to be "carbon neutral" in October 2006 it all sounded so good.

In the following months businesses jumped on the bandwagon and branded themselves green, while ministers talked enthusiastically of a future with electric cars and hills pocked with windmills.

But now it all sounds so different.

Suddenly the costs of the emissions trading scheme are starting to sink into public minds.
And, unfortunately for Labour, it's happening at a time when other factors such as rising food prices, oil prices and high mortgage rates are hitting households where it hurts.

New Zealanders may well have more of an appreciation of the environment than their counterparts in lots of other countries.

But when household budgets are really stretched, the fear in the political corridors of Wellington is that the public could begin to really question the wisdom of further petrol or electricity price rises to combat global warming. In an election year that is a dangerous scenario for any politician.

So what is this going to mean?

It now appears likely there will be a delay to some parts of the scheme - such as higher petrol costs scheduled for January 1 next year - to smooth the transition.

This is because the threat of a backlash is not only being felt by Labour, but it's also being felt by National and probably all of Parliament's smaller parties except the Greens.


There will be a scheme. And eventually someone is going to have to wear the cost of meeting our obligations under the Kyoto Protocol.

But the politics of the situation mean it just might not happen as soon as we originally thought.