Carbon tax back on agenda

Fairfax

GREEN GROWTH: Australian Prime Minister Kevin Rudd is under pressure to adopt more business-friendly climate change policies.

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Prime Minister-in-waiting John Key has put a carbon tax back on the agenda, three years after it failed to win widespread political support.

Labour said Mr Key's U-turn on the emissions trading scheme was his first broken promise.

Mr Key told Federated Farmers' national council yesterday a tax would be considered, along with other alternatives, in a select committee review of the emissions trading scheme.

The Labour-led government backed down on a tax when its support parties NZ First and United Future would not support it. National was also opposed, though ACT and the Greens were in favour.

Instead, the Government developed an emissions trading scheme to meet its requirements to reduce greenhouse gases under the Kyoto agreement.

Federated Farmers has opposed the world- first inclusion of farm animals, responsible for half of New Zealand's emissions, in the scheme and though Mr Key was careful not to promise to remove them, he did say it was ridiculous farmers were being asked to change when science had not found a way to stop the animals emitting gases.

He said the review would help understand what could practically be imposed on farmers. "I don't want to put farmers out of business so I can get some gong from the United Nations." Reconsidering a carbon tax had been suggested by ACT and had been put on the select committee's agenda at its insistence, though it was something National was not opposed to.

He said an argument could be made that a carbon tax would be "more predictable for a period of time as a transitional mechanism". He wanted the select committee to report back by September next year with a scheme that was "fair and compatible" with New Zealand's trading partners.

Australia proposes to include agriculture in its climate change legislation in 2015, but only if science can find a solution to the animal emissions problem. Mr Key said the Government would invest about $25 million in the search for climate change technology.

Mr Key also signalled a change in the way the Government would reform the Resource Management Act. The more complicated issue of water allocation would be set aside so the reform could be achieved within the self- imposed six-month deadline.

Mr Key's U-turn on the emissions scheme was his first broken promise, outgoing Climate Change Issues Minister David Parker said.

"John Key said clearly during the election that he would keep but amend the ETS. Now he has said he will suspend it completely. The ACT party is his excuse, not his reason. "No other party in Parliament clings to the discredited belief that climate change is some vast conspiracy except ACT.

"National promised in its campaign it would have an amended scheme in place for the start of 2010, but now it is backtracking and claiming that date is only a 'preference'. "

Earlier, federation president Don Nicolson expressed muted support for the new Government, saying he would withhold judgment till the first 100 days were up.

"Treat us with respect and dignity and economic prosperity is assured. Don't and the future is bleak," he said.

In a comparison with the removal of subsidies in 1985, he said that at the time "we were told the world would follow – 23 years later we are still waiting". In fact, farmers faced a "perverse situation" where opponents of farming were subsidised to mount legal challenges on environmental issues.

Kyoto Forestry Association spokesman Roger Dickie told Carbon News yesterday that the political deal to suspend the emissions trading scheme has scuppered a forestry investment worth $125 million, and that the association has had buying orders for land cancelled.

An Asian company had planned to plant 25,000 hectares of forest in New Zealand which would have meant scores of jobs in provincial areas, he said. He would not name the Asian company.

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