Editorial: Lost opportunity on emissions deal

18:00, Sep 15 2009

Once the emissions trading scheme was about saving the world from global warming. Now it is about who pays and who gets to pass the cost of their emissions on to someone else.

The deal cobbled together by National and the Maori Party is a triumph of political pragmatism. It is also an agreement that has ended, at least for the foreseeable future, the prospect of an enduring bipartisan approach by Labour and National. That turns New Zealand's emissions policy into a political football.

The deal is a political solution that fails to solve an environmental and economic problem. It will not provide long-term certainty to business or to consumers.

The angst of the Greens is understandable. The key changes agreed by National and the Maori Party reduce the costs to the consumers and businesses that pollute. Under the terms of their deal, the expected rise in electricity and petrol prices for the average household will be halved to about $165 a year.

Taxpayers will instead pick up the bill for the emissions, to the tune of $400 million over the next four years, according to the Government, or $1.6 billion, according to Labour, which says National has botched its carbon pricing.

Other changes will result in some businesses and agriculture being given more time to adjust, with a delay in bringing them into the scheme, while others are given less time.


That is good news for those who benefit, but it rather misses the point. The aim of the exercise is not to raise money to pay for New Zealand's Kyoto obligations. It is a stick to encourage those responsible for emissions to cut them.

It fails if those responsible for the emissions don't have to foot the bill. The squeaky wheels and those with the deep pockets have successfully persuaded National and the Maori Party to pass the cost of their polluting on to taxpayers.

The public won't be paying more for their petrol and electricity, but instead they will face higher taxes or less spending on schools and doctors.

Not only are the environmental stakes high. Unless New Zealand produces a credible policy, it faces the serious risk of finding its tourist flights empty and its exports boycotted, or worse, shut out of overseas markets.

New Zealand may contribute only 0.2 per cent of the world's total emissions, but that will not stop it being judged, particularly if competitors spot an opportunity to cloak protectionism in the mantle of environmentalism.

At the same time, New Zealand cannot cripple its economy with a policy so rigorous that it puts it at a disadvantage to its competitors. That would simply invite New Zealand industry to up sticks and set up where the restrictions on emissions were not so fierce.

National has defended the haste with which it has acted by saying it needs the policy in place before negotiators go off to Copenhagen at the end of the year, where the world will attempt to come to a consensus on what needs to be done to slow down global warming.

It is a pity that National did not strive harder to reach a similar consensus at home first.

The Dominion Post