26 August 2008

Emissions Trading Legislation Will Hurt

News that the Green Party has pledged its support for the controversial emissions trading legislation should be ringing alarm bells amongst all consumers of energy, according to the Greenhouse Policy Coalition.

Catherine Beard, executive director of the Greenhouse Policy Coalition says the emissions trading legislation before Parliament, due to its comprehensive coverage and lack of price safety valves, will be the highest cost scheme in the world.

"Unless the scheme is modified to allow for a more gradual exposure to the price of carbon in the economy, it is hard to see how the legislation will survive once the price shock flows through to consumers."

"The Green Party is claiming they have made the scheme even tougher than it was previously, which should ring alarm bells for the public."

"While Minister David Parker promoted the emissions trading scheme as being affordable at a price of $15/tonne of carbon, the international price of carbon has long since gone into the stratosphere and is now in the $40-50/tonne region - making this a high price to pay once those costs are passed through to every tonne of carbon associated with fuel and electricity."

Catherine Beard says while the Green Party claim there will be concessions in the form of making homes more energy efficient, it is hard to see how lagging hot water cylinders and token support for solar hot water heating is going to offset the average price increase of around $600 per annum per household, once all the costs of increases of electricity, fuel and biofuel are added together.

Catherine Beard says it is hard to imagine any other country introducing a scheme which will increase the price of energy to businesses, households and food producers, with so little concern about the impact it will have on the basic cost of living or the number of jobs that will be lost.

"This is a major economic reform, and the time should be taken to make sure the end result for New Zealand is not just a loss of business to other countries that fail to tackle this issue with similar stringency to New Zealand."

A View of Analysts' Expectations for EU ETS Phase II (2008-12) &III (2013-2020)

Source: World Bank - States and Trends of the Carbon Market 2008

ENDS

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