Now that legislation which will impose an Emissions Trading Scheme on us has been passed the papers are starting to count the cost.
The ODT says the scheme will hit consumers and exporters:
It seems consumers will bear the cost of the emissions trading scheme while farmers and horticulturists fear their businesses and New Zealand’s key export industries could pay the ultimate cost and be forced out of business.
But Agriculture Minister Jim Anderton has moved to ease the sector’s concerns, saying through a spokeswoman, that if there was no greenhouse gas emission mitigating technology, the sector would get additional time to adjust.
Would you buy a used reassurance from this man?
A BP spokeswoman said yesterday’s international price of carbon credits was $44 a tonne, which would increase the price of petrol 12c a litre.
A Meridian Energy spokes-woman said the company believed the ETS was the best way to change consumer behaviour, and she said the company accepted Government predictions of its impact on energy prices.
Those were: retail electricity price to rise 1c to 2c per kWh, gas 0.9c to 1.7c per gJ and a 20kg bag coal of 90c to $1.50.
Fonterra said the higher production costs would filter through to higher consumer prices.
Meat and Wool New Zealand chairman Mike Petersen warned the $5 billion sheep and beef industry could disappear.
Other than reducing productivity or the number of animals carried, little mitigation technology was available.
Horticulture New Zealand president Andrew Fenton feared his members could also go out of business.
The $2.6 billion export earner would lose its competitiveness and consumers become reliant on food imports from Chile, South Africa and China which had higher greenhouse gas emissions, he said.
“As our growers slowly go out of business under the weight of ETS costs, New Zealand consumers are going to end up eating imported product grown in countries with much higher carbon output than ours is now.”
Lincoln University farm management lecturer Guy Trafford, has calculated the cost of ETS in 2013 for a 4000-stock unit sheep and beef farm at $36,088 a year and for a 350-cow dairy farm $40,804.
“The problem for agriculture is that it’s essentially a tax and there is still a huge anomaly, as we seem to be bringing it in for agriculture when most of the world is ignoring agriculture.”
What will be the impact on consumers?
It depends on the international price of carbon dioxide at the time the sector is included, but the general consensus is the cost of everyday items will rise.
BP says if the ETS applied to it yesterday, petrol would rise 12c a litre at the pump.
The Government says retail electricity will increase 1c-2c/kwh, gas 0.9c-1.7c/GJ, coal 90c to $1.50 a 20kg bag.
HortNew Zealand say it will cost the sector an extra $40 million a year and Lincoln University says in 2013 it will cost a sheep and beef farmer $36,000 and a dairy farmer $41,000 a year.
The Southland Times says the ETS could cost 1000 jobs.
Southland’s economy would be hardest hit by controversial emissions trading legislation, an economic study has found.
Economic consultancy the New Zealand Institute of Economic Research found Southland would be hit hardest because of the importance of the dairy industry and the aluminium smelter to the local economy.
In contrast, Auckland and Wellington would be least affected because of the high concentration of service industries and public sector employment.
The Emissions Trading and Renewable Preference Bill passed into law by 63 votes to 57 on Wednesday.
The study, done before select committee hearings on the legislation, found agriculture, in particular, would suffer because costs of the scheme would fall heavily on export industries.
Metals manufacturing would also be hit hard, with capital falls of 6.5 percent and a 3.4 percent reduction in employment, it says.
The impact of the scheme on agriculture and related services and processing in Southland could result in employment reductions of about 1000 jobs, the report says.
And what will the impact on global emissions of carbon be? That too is up in the air but given New Zealand produces just .2% of the world’s emissions and most of that is from animals and the technology to reduce them is not yet available the answer is little if anything.
And, if carbon efficient businesses move from New Zealand to countries without an ETS and with lwoer environmental standards emissions may increase.