Open a market in emission credits

3 April 2006

Business Council: Open a market in emission credits – and let Kiwis act on climate change

New Zealand's Business Council wants the Government to open a trading market for green house gas emission credits.

The New Zealand Business Council for Sustainable Development – presenting 51 businesses whose $33 billion in annual sales are equivalent to 28% of gross domestic product - says its research points toward supporting the launch of a new market in tradable emission credits.

The council's Chief Executive, Peter Neilson, says the Government should surrender its monopoly on taking responsibility for the country's green house gas emissions – and start allowing businesses and individuals to work on, pay for - and in some cases profit from - the remedies.

Two major climate conferences in New Zealand last week had exposed the policy vacuum on what to do about lowering emissions. The Government's climate policy is due in the next few months. The fact that more than 700 people would turn up in Wellington for a climate change discussion shows deep and widespread concern – and the time to act has arrived, Mr Neilson says. The council's research was also showing Kiwis widely suspect something is going wrong with the climate, but few know what they can to do about it.

The Government now needs to give up the monopoly it gave itself for emissions when it rightly scrapped the carbon tax proposal.

"When it abandoned the carbon tax the Government effectively created a regime where there is a cap on emissions which can be traded, but made itself the only organization which needs to make trades to meet its obligations under the Kyoto treaty before 2012.

"The Business Council has backed a cap and trade regime. Scrapping the carbon tax has created a significant opportunity to consider what do to about domestic climate change before and after 2012."

Mr Neilson says the Government should now: • Start looking at how individual businesses should measure their own emissions – and start working with business on ways to reduce them • Identify projects that will reduce emissions for the same or less cost than the Government will have to pay for credits to meet its Kyoto obligations and • Contract with businesses to reduce those costs to the taxpayer so there is a win-win outcome • Introduce incentives immediately to boost sales of fuel efficient-low emission vehicles, cutting down one the major emission sources in New Zealand • Accelerate the insulation of 40% of New Zealand homes, now inadequately heated, further cutting emissions caused by fossil fuel based power generation • Achieve cross-party support on whatever climate change policies it opts for – because businesses, like those in the energy sector, plan up to 50 years ahead and business generally cannot afford major policy switches every three years.

Mr Neilson says larger emitters would be wise to start measuring their emission levels now – and be first in line for "grandparent" emission rights under a trading regime.

Talks the Business Council has had with political leaders and advisors indicate multi-party agreement on managing climate change is possible. The bipartisan approach, suggested last year by National MP Nick Smith, would be welcomed by business.

"The country deserves a policy that will last 36 years, not 36 months."

Some businesses were already profiting from reducing emissions. Some, who had followed Business Council emission measurement and management advice, had cut electricity and other costs, saving millions. Some industries, like the cement one, were aiming for a 12% cut in emissions.

"Controlling emissions need not be bad news. As a country, as individual businesses and consumers, we need to look at the least costly ways of knowing what our emissions are – and bringing them down.

"When Kiwis make the link between this – and preserving the New Zealand quality of life, I believe there will be overwhelming support for a government that gets on with letting everyone share in the task of measuring, managing and bringing down emissions."

ENDS

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