|
|
A group of the country’s most powerful business groups have pleaded with the Government to take a cautionary approach to committing the country to any emission scheme we can’t afford. By Greenhouse Policy Coalition executive director CATHERINE BEARD.
The government’s own economic analysis indicates that a 15 percent emission reduction on 1990 levels in 10 years’ time will cost each New Zealander $1400 a year, or $5600 reduced income for a family of four. Treasury advice to government was that a 10-20 percent emission reduction target range would impose a cost on New Zealanders that is eight times greater than the costs of other countries’ stated targets. The US Environmental Protection Agency estimated the Waxman Markey Bill (the emissions trading Bill passed in the house of representatives) would cost a US family US$1 a day, which is around 10 times less than a 15 percent emission reduction target will cost New Zealand families. Because of New Zealand’s projected 35 percent population growth over the period 1990 to 2020, our proposed target reductions are even more stringent when considered on a per capita basis. A target of 10 percent below 1990 levels equates to a 35 percent per capita reduction in emissions from 1990 to 2020. A target of 20 per cent below 1990 levels equates to a 42 percent per capita reduction in emissions from 1990 to 2020. This would require the average New Zealander to nearly halve their emissions in the next 10 years, or pay for the difference. The high cost of emission reductions in New Zealand is due to the fact that nearly 50 percent of our emissions are from agriculture where mitigation options are limited, we already lead the world with our high percentage of renewable electricity generation, we have had the highest population growth since 1990 amongst Annex 1 countries and we have the third lowest GDP per capita amongst Annex 1 countries. Indeed, of the countries that are considered to be “developing countries” under the Kyoto Protocol, and therefore have no emission reduction target, many are richer than New Zealand, including Qatar, United Arab Emirates, Kuwait, Singapore, Brunei and Hong Kong. The industry groups believe it is reasonable that New Zealand should do its “fair share” to reduce global emissions. This is in the interests of the global environment and for reputational reasons. However, taking on a costlier burden than other developed countries that are richer than New Zealand is something we can ill afford. For that reason the industry groups are strongly supportive of the conditions that must be met before New Zealand signs a new international emission reduction treaty, namely:
Analysis by NZIER/Infometrics found that if we do not get similar action from other countries in putting a price on greenhouse gas emissions in terms of coverage, timing of entry and free allocation, then the cost to New Zealand increases by 33 percent at $25/tonne and by 50 percent at $100/tonne CO2e or $8400 per year in reduced income for a family of four. This is likely to be exacerbated should there be no recourse to a liquid international carbon market. It has been suggested that there is a 70 percent difference in cost to New Zealand between LULUCF rules that would best suit our plantation forestry and LULUCF rules that would least suit our plantation forestry. Given the high cost of meeting emission reduction targets to the economy, the industry groups urged the Government to consult widely on the extent to which the above conditions have been met, and the range within which our negotiators will be given a mandate to agree to a final outcome. Most importantly industry group believe a failure to reach a global agreement in Copenhagen should trigger a process to put our emissions trading scheme on hold until such time as the stringency of our action is matched by our trade competitors. This should not wait until the first scheduled review in 2011, but be explicitly allowed for in the Bill currently before the House. A failure to do this in such circumstances would once again place New Zealand as a global carbon reduction leader, as opposed to doing our “fair share”, with all of the economic vulnerabilities such leadership would imply. Finally, on top of the cost of meeting an emission reduction target, developing countries are demanding significant amounts of money for adaptation to climate change from developed countries before they agree to limit future emissions. The cost to New Zealand could be equal to our total current aid budget. The industry groups have told the Government it needs to be consulting with the public on this possibility before it commits to a wealth transfer to developing countries. The industry groups that wrote to Ministers Nick Smith, Tim Groser and the Prime Minister John Key include the following; Business NZ, NZ Chambers of Commerce, New Zealand Business Roundtable, Meat and Wool NZ, Federated Farmers, The New Zealand Seafood Industry Council, Road Transport Forum, Major Electricity Users Group, Greenhouse Policy Coalition.
Energy NZ No.10 Spring 2009 |
As we approached the round of UNFCCC climate change negotiations in Copenhagen in December 2009, a wide group of industry associations wrote to the Government urging it to proceed with great caution before signing the country to any future emission reduction commitments that we may be unable to achieve, unable to afford, and would come at a higher cost than other countries would be prepared to pay.