Isramart: New Zealand stands by carbon trading plans

Isramart news:
New Zealand will go ahead with its proposed carbon trading scheme despite Australia abandoning its plan to price carbon last month, prime minister John Key said this morning.

There had been reports in the press that the Key administration might follow Australia’s lead and abandon its emissions trading legislation in the face of public opposition.

But speaking in an interview on Television New Zealand earlier today, Key said there was “no chance” that the scheme would be postponed, pledging that it would be launched as planned from 1 July this year.

Key argued that abandoning the scheme would risk international scorn and trade boycotts, as many other nations were already engaged in emission trading schemes (ETS).

“If our goods were blocked going into international markets or if we weren’t seen to be playing our part when it comes to climate change, I think that would be bad for us,” Key said. “Of the 38 countries that signed the Kyoto Protocol, 29 of them [already] have an ETS.”

All EU nations are involved in an emissions trading scheme, although the
US and China currently only operate regional emissions trading schemes and have no set date in place to launch national schemes.

The New Zealand scheme will cover all businesses in the forestry, transport fuels, industrial processes, synthetic gases, agriculture, waste and electricity production sectors.

All participants will have to measure and report their emissions by 2012 before then taking part in a cap-and-trade scheme broadly modelled on that already in place in the EU.

Companies covered by the scheme are expected to pass the resulting carbon price on to customers and Key admitted that the plan will cost households NZ$3 ($2) a week and is expected to raise the cost of petrol by three cents a litre, while increasing
electricity prices by five per cent.

The government will use revenues of NZ$600m ($404m) generated by the scheme for planting trees, as part of a wider NZ$1.6bn ($1.1bn) planting programme over the next five years.

“The question for a household is are they prepared to pay $3 a week for the insurance premium of our environment, and I think the answer to that is ‘yes’,” Key said. “We’ve got a very modest ETS.”

The New Zealand opposition Labour Party’s energy spokesman Charles Chauvel criticised the government’s plan on the grounds that it would raise electricity prices for poorer households.

“This comes at a time of nil wage growth, continuing upwards pressure on those on fixed incomes and forecast inflation of nearly six per cent,” Chauvel said in a statement. “[Our] ETS would have provided transitional relief for low and middle income households. [The government] has failed to design a scheme that
does this.”