Emissions trading money scramble

BY COLIN ESPINER, POLITICAL EDITOR

Kenny Rogers used to advise against counting one's money before leaving the table, but it appears some iwi groups just can't wait.

As Climate Change Minister Nick Smith prepares to take the deal hammered out with the Maori Party over the emissions trading scheme (ETS) to Cabinet today for sign-off, Ngai Tahu is already boasting that the forestry concessions alone will be worth millions to the tribe.

As an iwi full of smart businesspeople who have taken the odd gamble themselves, Ngai Tahu's bluff of court action over the claimed cut in the value of their forests under the ETS could not have been more perfectly timed.

Despite the Aikman report into Ngai Tahu's claim recommending the Crown reject its bid for compensation, followed by Treasury advice and a decision by the former Labour government not to cough up, National is poised to deliver. Why?

The Government needs the Maori Party's five votes to pass its amended ETS, and Ngai Tahu's claim has become one of the central negotiating points in the deal.

Nor does National fancy a court battle with a major iwi right at the moment, so it's easier to dip into the taxpayer purse.

Exactly what has been negotiated is still not known - although the smart money is on carving off about 30,000 hectares of Department of Conservation land that Ngai Tahu, and a group of smaller iwi which also claim to have lost a Treaty right, can use to plant trees and collect the carbon credits they will attract under the ETS.

Other sweeteners are said to include a fully funded home- insulation scheme for the poorest of households and a Treaty clause that will allow any other tribe that feels its claim or its settlement is affected by the ETS to take action.

That caveat has led Labour's leader Phil Goff to express concerns that Treaty settlements thought to be "full and final" could be unpicked one by one, which would have put rather a dent in National's timetable for an end to all claims had it not already been shelved for the sake of political expediency.

Labour has also cried foul over the extent that ETS dealing has been done behind closed doors, although, of course, when it was in power, Labour did the same.

It's one of the less-attractive features of MMP that often deals are hammered out behind doors rather than on the floor of the Debating Chamber, and often Opposition MPs don't know what's been agreed to until the House begins debating the legislation.

Where Goff may have struck more of a nerve, however, is his claim last week that certain iwi were getting a "sweetheart deal" with the Government based on their ethnicity, while other foresters were left out, well, in the woods.

"Kiwi not iwi" anyone?

It's hard to believe it's less than four years since National billboards decrying special treatment for Maori were erected under former leader Don Brash, leading to an at-times bitter race debate that forced Labour to back right away from anything that could be perceived as favouring the tangata whenua.

Prime Minister John Key will need to be careful he is not tarred by this brush, too, particularly since this is not the only case in which the Maori Party has been able to extract concessions from the Government.

Co-leaders Pita Sharples and Tariana Turia have been quietly pursuing strategies to free up Crown funding for a variety of social and justice programmes to be tagged specifically for Maori - essentially Labour's former Closing the Gaps scheme by another name.

Another group of National supporters is also unhappy with the Government over the ETS - farmers gave Key a strong talking-to at the Federated Farmers' council meeting in Wellington. While National plans to water down the existing scheme and give farmers another two years to get used to the idea of having to pay for the methane emissions of their animals, it was clear the depth of anger over agriculture's inclusion in the ETS is deeper than the Government had hoped.

Federated Farmers president Don Nicolson's pronouncement that he'd "had a gutsful" of farmers being blamed for New Zealand's carbon emissions and his call to scrap the scheme coincided with Australia's decision to exclude its agriculture sector from the ETS.

Key's explanation that the two countries had very different emissions profiles and that farmers couldn't expect the same treatment as their trans-Tasman cousins was correct, but somewhat undermined by his previous insistence that New Zealand and Australia could align their ETS into a trans-Tasman carbon-trading market.

With so much at stake and the potential to annoy so many different parts of the electorate, Key might just be ruing the day National opposed Labour's previous idea of a flat, universal carbon charge that it could have now blamed on the previous administration.

Part of the problem is that the Government is trying to make decisions based on huge unknowns, such as the price of carbon in 30 years.

That has led to it picking and choosing the numbers that best suit its arguments.

Therefore, Key has confidently predicted the average cocky won't pay more than $3000 a year under the ETS by 2030, yet at the same time has dismissed Treasury projections that the ETS could add about $110 billion to national debt as "nonsense".

Finance Minister Bill English had the wit and the honesty to inform the House last week that this was simply because "advice we disagree with is bad advice; advice we agree with is good advice".

However, this does somewhat undermine any other long-term fiscal projections, and makes a mockery of National's insistence that the ACC is in need of long-term financial assistance or that universal superannuation is sustainable into the future.

On whose calculations are these assumptions based? Or are they, too, nonsense?

Part of the reason for the Government's haste in getting the amended ETS through Parliament this week is the looming Copenhagen conference, where the next round of international bartering over a post-Kyoto emissions period is set to take place.

Key has tried his best to stay clear of the conference - perhaps for fear being associated with any failure or any European jeering at the offer the Government plans to make there.

However, with the number of world leaders who have now confirmed their attendance it is becoming increasingly difficult for the Prime Minister to stay away.

While no-one is expecting Key to take part in complex negotiations - that's the job of officials and ministers - a large part of New Zealand's participation is, frankly, symbolic.

Nothing our country does will make a blind bit of difference to climate change, given we represent less than 0.8 per cent of world emissions.

For New Zealand, it's all about trade and tourism and image, and being seen to do the right thing. And that starts at the top.

- © Fairfax NZ News