Business attacks Govt carbon plan

Business lobbyists say the Government's plan for a "carbon neutral" economy could cost each household $19,000 a year by 2025 and still fail.

"There are currently no low-cost ways for New Zealand to reduce emissions significantly," Business Roundtable executive director Roger Kerr said today.

Prime Minister Helen Clark has set a goal for New Zealand to be carbon neutral and to define New Zealand as environmentally sustainable.

But Mr Kerr said today that though the business community was not generally opposed to action to put a low initial price on carbon, "rhetoric about carbon neutrality and leading the world is fanciful and irresponsible".

He said the Business Roundtable and the Petroleum Exploration and Production Association (Pepanz) commissioned a study by Adolf Stroombergen of Infometrics Ltd, which had previously worked for the Government's emissions trading group on a carbon trading scheme.

The study analysed a nominal target of reducing New Zealand emissions to 1990 levels by 2025.

"The impact on numerous industries would be devastating – reductions in output of the order of 30 per cent to 40 per cent are reported in the case of sheep and dairy farming – and major industrial firms could face complete closure," Mr Kerr said.

Pepanz executive officer John Pfahlert said the study called into question the consistency of the Government's twin goals of faster economic growth and carbon neutrality.

"Businesses and households have to take them seriously – they are surely not intended to be a fraud on the electorate," he said in a statement.

"Yet the Government is not on track to meet its growth target and it is clear from the study that the economic impact of carbon neutrality policies would be far greater than the Government has maintained".

- NZPA