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PM Press Conference: Emissions Trading Scheme Amendments

PM Post Cabinet Press Conference with Tim Grosser - 2nd July, 2012

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By Mark P. Williams

Today the Prime Minister was accompanied by Tim Groser at his regular post-cabinet press conference to talk about the amendments to the Emissions Trading Scheme.

In his capacity as Minister for Climate Change Issues, Mr Groser spoke about New Zealand's commitment to lowering its emissions to 1990 targets.

The four main changes are:
1) keeping the 'one-for-two' obligation until after this year. Participants will continue to surrender units for half the carbon they emit;
2) Maintaining the $25 price cap until at least 2015;
3) Introducing off-setting for pre-1990 forest land owners, and allocating the full second tranche of compensation where off-setting is not taken; and
4) Leaving agricultural emissions out of the ETS for the

The PM said that ordinary New Zealanders will not feel any affects until after 2015.

He argued that too stringent changes would drive businesses offshore to companies with very few or no climate change measures in place. He emphasised that the intent of the scheme is to gradually reduce the carbon intensity of the New Zealand economy and bring in changes which encourage exporters and householders to change their behaviour over time.

The Hon Tim Groser described the present measures as a fair and balanced approach.

He said that mandatory recording obligations were being brought in with the co-operation of New Zealand farmers.

Mr Groser was at pains to point out that no other country in the world has put a carbon price on biological emissions and added that no other country in the world was doing more than New Zealand to deal with the agricultural emissions.

Questions

Mr Groser was asked what difference the changes would make to New Zealand's emissions profile. He answered that New Zealand remains on-track to meet its Kyoto Protocol obligations. Pressed as to whether they would fall or rise he reiterated that they will meet the target.

The PM was asked whether agriculture would come under the ETS under his government. He responded that it might but not at present and not until other countries were also making greater progress.

The PM and Mr Groser were asked whether it was fair to say that the consumer was bearing the majority of the cost for the ETS. The PM responded that he was not prepared to risk sacrificing jobs in the present uncertain economic times.

They were asked if they would introduce auctioning. Mr Groser responded that they would be auctioning but that it was an approach which was subject to "the law of unintended effects" and they would be seeking extensive consultation in their approach to auctioning.

Asked about trading schemes, Mr Groser emphasised that not all carbon unit trading schemes were equally valuable and they should be treated cautiously.

Mr Groser was asked about the recommendations of the independent review panel which had rejected the $25 price cap. He responded that the review panel had begun from a different philosophical perspective, saying that they had sought to raise costs irrespective of economic uncertainty.

The PM said that he felt the ETS was a good scheme which was "in the right place at the moment"

The PM was asked about his 2013 budget allowance being diminished by the scheme, given that the ETS was already set against it. He responded that flexibility would be sought in other areas.

Asked why the government would not take the charges off altogether, Mr Groser responded that it was something that climate change sceptics would want to do and that he would not take such an approach

Asked about the effect of carbon pricing on Australian markets, Mr Key said that he would not wade into the debate as it was a matter for Australia.

Other Business

The PM then outlined his week including his visit to Australia to deliver the John Howard Lecture in Sydney. He will also meet with representatives from the four major Australian Banks in Sydney and Melbourne, and undertake meetings with the Business Council of Australia, Origin Energy, Rio Tinto, Blue Scope Steel.

Other Questions

The PM was asked why he was meeting the big four Australian banks. He said that he would be seeking advice about their views on the Australian economy because of the importance of Australia as a market for New Zealand.

The PM was asked his opinion of Tariana Turia's view that the recent High Court ruling on the Pouakani part-ownership of the Waikato River would open up further claims for Maori ownership of rivers. He responded that it was a complex ruling and that he did not feel that it would have significant wider implications. He was then asked whether similar claims on the Wanganui River would cause issues for potential investors in Mighty River Power. He said it was not something he could comment upon.

The PM was asked whether he would introduce a minimum price on alcohol. He responded that the complexities of the case regarding how things were measured would mean that it was a far more challenging issue than cigarettes. Using the example of Scandinavia he suggested that simply introducing a minimum price was unlikely to have the desired effect of reducing binge drinking and unhealthy levels of alcohol consumption.

The PM took questions on the use of national standards data. Asked whether he felt that the data collection was presently up to scratch, he responded that at present it was not but would improve over time. He said that NCEA and other systems all had a period of settling before they could be as effective as possible. He added that there was no point in comparing a decile one school and a decile ten school.

Asked why he felt that data collection was erratic, the PM responded that it was because the government had given schools a high degree of freedom as to how they collected and submitted the data to the Ministry of Education.

Asked whether he felt that the collection of national data would have "some perverse incentives" for schools, effectively encouraging them to get poorly, performing kids "off their books" the PM responded that this was unlikely and that the purpose was to assess each child individually and locate support where it was needed.

The PM was asked whether Tariana Turia ought to apologise after blaming officials for not informing her of the allegations of fraud made against a Women's Refuge in Palmerston North when she had been briefed on the matter. Mr Key said it was not a matter he had spoken to her in person about but understood that it was a dispute over the "level of detail" in the briefing.

The PM was asked about the morale of public sector workers with the advent of MoBIE. He responded, perhaps he saw the issue "through rose-tinted glasses" but he felt that although "no one likes change" morale was probably quite high.

The PM was asked whether all people on benefit ought to be drug tested. The PM said that the debate was specifically regarding beneficiaries who refuse work offers because they may face compulsory drug testing ought to be forced off benefit. He added that he felt that the welfare system was a system of mutual obligation and if people can work then they should work. Pressed over whether people on benefit who use drugs recreationally but meet their obligations ought to be entitled to welfare at all he responded that it was a different debate.

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Audio Link:
http://img.scoop.co.nz/media/audio/1207/PressConference2ndJuly2012b.mp3

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ENDS

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