Economic Risks With Proposed Emissions Trading Scheme

Dr Cullen, in a speech to a seminar at Buddle Findlay on the 21 November, claimed any business industry group that does not give its unqualified support to the proposed emissions trading scheme is failing to live up to their ‘moral and economic responsibilities’.

He calls economic analysis by Castalia – which shows the proposed emissions trading scheme could come at a significant economic cost – “alarmist”.

Catherine Beard, executive director of the Greenhouse Policy Coalition, which represents a range of energy intensive businesses, says using emotive terms about any group that questions the design of the proposed emissions trading scheme is just a political tactic to shut down debate and avoid having to address the serious issues that are raised on closer examination of the scheme.

“If the Castalia report is ‘alarmist’ it is because they were alarmed at the economic impact that the proposed emissions trading scheme will have on our economy the way it is currently designed. They were probably called ‘alarmist’ when they were the first economic consultancy to predict that instead of a big cheque from signing the Kyoto Protocol we would have a big deficit due to deforestation and economic growth.”

Catherine Beard says that far from being alarmist the Castalia report offers some solutions that would make the scheme less harmful to our economy, such as introducing a price safety valve and measuring emissions against ‘world’s best practice’.

“The price of carbon is volatile and rising and no other country in the world is going to expose its total economy to a price that is driven largely by politics or the weather in Europe, any time soon.”

Catherine Beard says the Castalia Report points out that most countries that have an emissions trading scheme – or that are planning for one, are being very careful about scheme design to ensure they do not lose industry and jobs to countries that do not put a price on carbon. “That is all we are asking for in New Zealand”, she says.

“I am sure that most business industry groups would agree, that we all have a moral and economic responsibility to develop and emissions trading scheme that fulfils our international responsibilities, but does so in a way that does not drive our highly efficient industries to other countries.”

ENDS

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