An emissions trading scheme is a better option for New Zealand than a carbon tax, Environment Minister Nick Smith told a National Party Bluegreen forum at Totara on Saturday.
He said an ETS is better able to recognise forests which play a critical role in offsetting emissions and in our economy; it’s better able to recognise limits rather than just setting a price as a tax would; and it keeps us in step with most of our major trading partners. Europe and the United States already have an ETS and, in spite of the debate going on across the Tasman now, Australia is likely to have one soon.
He likened an ETS to the quota management system for fisheries. Companies will be able to buy and sell carbon units in the same way they buy and sell fishing quota.
The government had been very mindful of the problem of carbon leakage when designing the scheme.
It would be easy to reduce emissions if a company moved its production somewhere else but that wouldn’t do anything for global emissions. If for example Holcim moved cement production to China, New Zealand’s emissions would go down but it’s likely global emission would increase because environmental standards wouldn’t be as high there as here.
“That would have done nothing for the environment and would costs New Zealanders’ jobs,” he said.
Dr Smith also stressed that the ETS was not an excuse for the government to take money from people.
“This is not a cash cow for the government to profit from. The scheme is fiscally neutral . . . foresters will gain, other people will pay, but it’s fiscally neutral for the government.
Agriculture produces about 6% of emissions in Britain and 14% in Australia but it accounts for around 50% of emissions in New Zealand.
“Every country under Kyoto has to cover for agriculture but when it’s minor the government covers. In New Zealand where it’s 50% of our emissions doesn’t have that choice.”
However, he said that emissions per kilo of milk fat and lamb had been reducing by 1% a year over the last 10 years.
Around 90% of the increase in emissions have been from developed countries but in the next 30 years 97% of the increase will be from developing countries.
“Even if developed countries stop all emissions, climate change will increase because of the developing countries.”
Most developing countries have a high proportion of emissions from agriculture, for example in Uruguay it’s 80%. The Global Alliance to support research will enable developed countries to share research with developing ones to help them reduce emissions.
Dr Smith acknowledged that most farmers were unhappy with the prospect of an ETS but not doing anything would endanger trade.
“Agriculture is an export industry and we trade on the basis of being clean and green. We can’t compete on the basis of being the cheapest.
“We are not going to be a leader but we can’t be a lagger because other countries will not allow access if we aren’t carrying our fair share of the burden of climate change.”
National’s Dunedin list MP, Michael Woodhouse, also stressed the risk to trade from doing nothing.
“Even if you don’t believe in global warming, consumers in our markets do and we will face barriers to our produce if we aren’t seen to be doing something,” he said.
Of all the information I’ve heard on the whole global warming issue that’s the most compelling.
Regardless of the science, the politics and emotion demand action.