NEWS RELEASE
7 July 2008
High Carbon Price Will Hit Households And Business Hard
Catherine Beard, executive director of the Greenhouse Policy Coalition, representing the energy intensive sector on
climate change issues, says with the price of carbon hitting a two year high, new analysis shows householders and
businesses can expect a much bigger bill from the proposed emissions trading scheme than the government would like to
admit.
"Based on today's carbon market prices, householders will have to find nearly an extra billion dollars per annum as a
result of the emissions trading scheme."
"Analysis shows (see attached) that in the seven months since the emissions trading Bill was tabled in Parliament in
late 2007, carbon prices have increased from the much talked about (by Hon David Parker) $15/tonne of CO2, to CER's now
trading at $40.00 plus/tonne."
"This means a representative household could now expect to pay an extra $510 per annum for the increases in petrol and
electricity prices as a result of carbon charges, or an extra $614 per year if the increase in the cost for biofuels is
added in. Catherine Beard says this is a staggering 221% increase in the cost of this legislation from 7 months ago, and
the upward trend in the carbon markets looks set to continue."
"In the commercial sector, which is dominated by small business in New Zealand with typically less than 5 employees,
they can expect a price increase of over $3,000 per annum for gas and electricity, up from $1,200 per annum had the
price remained at the much talked of $15/tonne CO2."
"A larger commercial business, such as a supermarket, can now expect price increases as a result of the emissions
trading scheme in the region of $60,000 dollars per annum (up from $23,000 per annum at $15/tonne) which will no doubt
be passed on to consumers if the businesses of this size can not absorb the increase in costs and remain profitable."
Catherine Beard says carbon analysts are talking about the CO2 market looking more and more like the crude oil market,
with CO2 prices closely following oil prices, with added volatility.
Catherine Beard says the Greenhouse Policy Coalition has long been advocating the need for a price safety valve on the
price of carbon, until such time as the international carbon market matures and reflects least cost emissions
reductions, rather than the political decisions made in Europe.
"Australian economist Ross Garnaut, who has just presented a report on emissions trading for the Australian government,
has recognized the risk of a high and volatile price of carbon in the transition to a global carbon market and has
included an option of a low fixed carbon charge in the first two years of an emissions trading scheme in Australia."
"The current emissions trading bill before Parliament needs some significant changes to prevent it damaging the New
Zealand economy, and we urge all MP's to ensure that Parliament takes the time to get this legislation right before it
is passed into law."
ENDS