Closer alignment of climate policies welcomed

Closer alignment of climate change policies between New Zealand and Australia is welcome news

“All New Zealanders should welcome the announcement of closer alignment between the New Zealand and Australian governments’ on climate change policy,” said Ralph Matthes, Executive Director of the Major Electricity Users’ Group (MEUG). He was commenting on the Joint Statement on Strengthened Trans-Tasman Cooperation by Prime Ministers Rudd and Key announced 2nd March 2009.

“There is a lot of work needed to achieve harmonisation of both countries emissions trading schemes (ETS) since the New Zealand scheme and the proposed Australian scheme are currently very different.

“For example Australia proposes a cap on how high carbon prices can go, while New Zealand has none. In Australia an independent agency will administer the scheme while in New Zealand allocation policies will be approved by a select committee, ie we have a highly politicised approach.

“Another important difference between Australia and New Zealand is they are going to wait to see the outcome of international discussions later this year (primarily the Copenhagen meeting) before finalising their scheme. New Zealand is proceeding with implementation of the controversial ETS enacted in the least few weeks of the previous administration.

“In the electricity sector this will see the cost of power to all consumers increase on 1 January next year as carbon costs are passed through by suppliers. In Australia power prices might go up towards the end of next year if they proceed with an ETS; but that looks increasingly uncertain as the economy heads into a recession and political support for the scheme becomes polarised.

“MEUG believe there is a serious gap between the public perception of where climate change policy is at in New Zealand and reality. Many consumers and businesses are under the impression the ETS is on hold and there is a review to see how, in these current difficult economic times, New Zealand should adapt its climate change policies.

“The reality is that the controversial ETS law passed last year is being implemented on the timetable set out in the legislation. In 10 months time households and businesses will have to pay more for power and a year after that more for fuel.

“If the ETS is not radically modified and implementation timing aligned with that of Australia, businesses making decisions on whether to continue to operate here or make new investments; will choose Australia. These are very high stakes. In these uncertain times and until final decisions are made, businesses will see the Australian approach and timing as much more pragmatic” concluded Mr Matthes.

ENDS

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