Emission compo for Kiwi homes

The Government is preparing to compensate households hit by higher power and fuel prices to win backing for its emission trading scheme.

The bill outlining the scheme was reported back from a select committee yesterday with about 900 amendments - mostly technical - but its fate rests on Labour striking a deal with NZ First and the Greens.

Energy Minister David Parker hinted yesterday that an estimated $140 million that state-owned enterprises were expected to reap from the scheme could be passed on to households, some of it as help to make them more energy-efficient.

Generators such as Meridian, with sustainable wind power and hydro, stand to gain from higher power prices but do not face a cost for emitting carbon.

The new law seeks to set up an emission trading scheme, rewarding those who reduce climate-changing pollution and punishing those who increase their carbon footprint. Sectors will be brought into the scheme progressively, starting this year with forestry. The scheme is expected to push up the cost of fuel and power.

NZ First leader Winston Peters has already won a commitment that superannuitants will be given a rebate for rises in electricity prices.

The Greens have pressed for extra funding to make homes more energy-efficient and to reduce power bills, and for extra subsidies on public transport to offset price rises.

Co-leader Jeanette Fitzsimons said she would be happy with NZ First's idea of a payment to SuperGold card holders, but would like it to be extended to young families.

The Greens would not favour a subsidy based on energy usage, preferring a flat payment to all households. That would be a "citizens dividend" from higher prices.

The Greens won some concessions at the select committee - but not those on their main wish list, such as an earlier phased entry into the scheme for transport and agriculture and a "biodiversity" move curbing the felling of native forests and their replacement by exotic trees.

Prime Minister Helen Clark would not discuss details but said the Government was in "long and constructive" talks to win support for the law.

Mr Parker said the bill was in "good shape".

Major changes by the committee included more generous allocation of emissions trading units to owners of forests planted before 1990, and allowing allocations of free units within the existing cap to new emitters and those expanding their businesses - the "Holcim cement" clause. Holcim wanted to expand output at a new factory that would increase total emissions, though the intensity of emissions for each unit of production would be lower.

Mr Parker said that without an allowance Holcim could instead build in China with no advantage for the world's climate.

National climate change spokesman Nick Smith said the bill was flawed and would need substantial amendment. "The scheme's a giant cash cow from which the Government will profit by more than $23 billion from the extra costs, like the 7 cents a litre on fuel and 18 per cent on electricity."

But Mr Parker said National was finding excuses to oppose the bill, and using figures based on gains by 2030. The revenue to the Government was "inconsequential" and forecast by the Treasury at less than $250 million by 2020.

"They are deliberately scaremongering. There's no huge windfall gain there."

 

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