UK Government's environment moves send a strong signal to New Zealand exporters to lower carbon

The UK Government's move to reform air passenger duty from two to four distance bands, increasing the cost of flying to New Zealand, is just the start of actions New Zealanders will see from throughout the world in a bid to lower emissions.

It sends a strong signal to New Zealand business to lower emissions and move into the new low-carbon economy, or suffer from failing to address what Ernst and Young has called one of business' top 10 strategic risks.

The New Zealand Business Council for Sustainable Development, whose 71 members' $59 billion in annual sales equate to about 43% of gross domestic product, says the lift in UK air passenger duties, starting from November 1 next year, to "improve environmental signals" is part of an immensely strong commitment to lowering emissions.

Business Council Chief Executive Peter Neilson says the seven major environmental measures in the UK Government's pre budget stimulus package reflect what New Zealand's export industries will increasingly face worldwide, as our major trading partners move quickly to lower emissions and manage climate change.

"The news isn't all bad for New Zealand," Mr Neilson says. "We have lower carbon content in many of our products. It's important we stay competitive. Stronger emissions trading regimes are coming in the EU, the US, Australia, Japan, possibly China and elsewhere.

"Carbon labelling of all imported products and services is coming in the 27-nation EU bloc, which takes more than $6 billion of our exports each year.

"New Zealand needs to measure and lower carbon content in its exports, including air travel, and lower emissions we make as individuals and households. There are several ways to do this, in addition to emissions trading, which New Zealanders will enthusiastically welcome.

"They include insulating our homes, providing incentives to buy low-emissions vehicles, and boosting the money we're investing in renewable energy and stunning world-leading new clean technologies being developed by New Zealanders," Mr Neilson says.

"Our initial research shows this could involve more than $12.3 billion in new investment here in the next 10 years, creating thousands of new 'green' jobs. Interestingly, the UK Government is firmly focused on this now - and on creating new jobs through 'green growth'. They already claim their policies are driving £50 billion (about NZ$150 million) of investment in the low-carbon sector over three years. The UK's Climate Change Bill introduces a legally binding target to cut greenhouse gas emissions by at least 80 per cent by 2050, the most ambitious in the G7, building on plans to deliver a one-third reduction in emissions from 1990 levels by 2020," Mr Neilson says. "We would be better focused on how airlines flying here can switch to nil or low-emissions fuels by 2011, rather than standing in front of the low-carbon steam roller which is now coming rapidly down our international supply chains."

Other UK Government environmental and economic stimulus measures include:

• introducing a green stimulus - ensuring part of the fiscal stimulus supports low carbon growth and jobs by accelerating £535 million of capital spending on energy efficiency, rail transport, and adaptation measures. 76,000 low-income households will benefit earlier from better heating and energy efficiency, up to 200 new rail carriages will be delivered earlier and 27,000 homes will benefit sooner from flood defences;

• successfully securing inclusion of aviation in the EU Emissions Trading Scheme from 2012, and holding Europe's first Phase II carbon auction on 19 November 2008;

• retaining the Renewables Obligation to provide financial support for large-scale renewable electricity and extending it by at least ten years, ensuring investors can plan with confidence for the future. This will complement the introduction of a feed-in tariff for small-scale renewable electricity and a renewable heat incentive to reward households and businesses that generate renewable energy on site; and

• following a fall in pump prices of over 20 pence per litre from their summer peaks, the postponed two pence per litre fuel duty increase will go ahead on1 December 2008. At the same time, the Pre-Budget Report shows how environmental policies can respond flexibly to help people and businesses through tough times, while reducing carbon emissions by

• installing 600,000 insulation measures this winter, up 70 per cent on last winter, through the £6.8 billion Home Energy Saving Programme, half of which is funded by energy companies. This will help households save up to £300 a year on energy bills and reduce carbon emissions;

• continuing to provide a clearer environmental signal through reform to vehicle excise duty, while ensuring that no driver in any given band will pay more than £5 extra in 2009 or £30 extra in 2010.

ENDS

The Business Council believes sustainable businesses are profitable, contribute to social progress and ecological balance - and protect New Zealand's quality of life. The Business Council's 71 members jointly employ more than 88,000 people in managing resources, manufacturing, retailing and the service sector. Members contribute annual sales of $59 billion to the economy, equivalent to 43% of GDP. The Business Council runs a national online survey panel, ShapeNZ, to allow public input on major issues. The panel has more than 14,000 members, is built from purchased lists and is representative of the population as a whole, compared with the 2006 census. ShapeNZ members register and provide demographic and previous party vote information to ensure results can be accurately weighted to reflect the New Zealand population. A report is available here on ShapeNZ methodology. Registration is also available at www.shapenz.org.nz.

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