Coal firm pays for emissions report

Last updated 22:55 11/01/2009

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A report highly critical of the Government's climate change policy was partially bankrolled by one of the country's largest coal miners and state-owned companies.

Information issued under the Official Information Act reveals Solid Energy paid hundreds of thousands of dollars towards the report into the impact of the emissions trading scheme (ETS).

To encourage use of more environmentally friendly energy sources, the scheme imposes taxes on anything that emits greenhouse gases.

As a miner of coal, which produces greenhouse gas, Solid Energy faces higher operating costs and potentially dwindling demand.

Solid Energy gave $240,750, including GST, to the $1 million project by the New Zealand Institute of Economic Research (NZIER) on the economic impact of the controversial legislation.

The final report said the emissions trading scheme would impose a heavy economic cost on the country, costing households about $3000 a year by 2025 and reduce average wages by $90 a week.

Solid Energy has defended the spending, saying it regularly commissioned research to remain fully informed about its business environment and the implications of any regulatory changes.

"We pride ourselves on being the best informed we can be," a company spokeswoman said.

"It needs to be remembered SOEs are businesses like any other enterprises."

But Green Party co-leader Jeanette Fitzsimons said the spending was inappropriate, as it was effectively taxpayers' money and the coal industry funding may have "coloured" the report's findings.

"It's not an SOE's job to spend money to try and undermine government policy. It's effectively taxpayers' money as it would have come back to the Government in its dividend," she said.

The mining company incurred the ire of the Labour government in 2007, when it used a paid informant to spy on a group of West Coast anti-mining protesters.

The National Government has refused to wade into the issue. "The research expenditure is an operational matter for each SOE board," a spokeswoman for duty minister Anne Tolley said.

Industries NZIER predicted would be hit by the legislation included agriculture, petroleum refining and mining.

"Mining and quarrying is most impacted by reduced demand for coal from the electricity industry," the report said.

A review of the institute's report by economic consultants Infometrics found its "conclusions follow logically" and the conclusions were "robust". However, it did draw some criticism from Victoria University Climate Change Research Institute director Martin Manning, who said the institute used too narrow a scope with its economic modelling.

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The company defended the funding in a briefing note requested by then state-owned enterprises minister Trevor Mallard, saying it was to enable it to understand "optimum climate-change response options".

It also spent a further $27,000 on another institute research project, but has refused to reveal the project's subject matter on the grounds of commercial sensitivity.

Greenpeace NZ executive director Bunny McDiarmid said it was appalling that a coal company funded by the taxpayer could finance a report that potentially could influence the Government's climate change policy. "There was a clear conflict. It's public money that's going into that."

- The Dominion Post

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