ETS should be put on hold following Australian decision

New Zealand should put its emissions trading scheme on hold following Australia’s decision to stop work on its own scheme, the Greenhouse Policy Coalition said today.

Australia is shelving its ETS plans until at least 2013 because the Government does not think it can get the numbers to pass the necessary legislation and it also wants to take into account any international agreement that follows the expiry of the first commitment period of the Kyoto Protocol, which ends in 2012.

“The absence of equivalent schemes among key trading partners leaves New Zealand out on limb, with businesses and consumers facing increased costs from 1 July 2010 that other countries won’t face, and all of this in harsh economic times,” says the Coalition’s Executive Director, David Venables.

“With Australia now effectively dumping its scheme altogether, with a vague promise to maybe pick it up again in 2013, the situation has worsened. New Zealand will be ahead of the pack on 1 July when industrial companies come into the ETS and face a price on carbon with no prospect of their competitors in Australia facing a similar cost.

“The landscape has now radically changed and New Zealand should put its scheme on hold until Australia has a scheme or at least until there is a new international agreement. This means postponing the 1 July and other entry dates for the ETS.

“The Coalition acknowledges the Government’s support for business in moderating the ETS during the initial transitional period, but with the latest news from Australia we have ended up in front of the pack. Also, the financial support offered under the ETS won’t be enough if our trade competitors don’t put a price on carbon. We support New Zealand doing its fair share and being a fast follower, but not setting the pace for other, bigger economies.”

ENDS

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