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The National Government’s decision to not restrict cheap international carbon credits to secure the vote of ACT leader John Banks has enormous implications for the forestry sector, Labour’s Climate Change spokesperson Moana Mackey says.
“Measures being introduced in the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill will further shrink the market for foresters carbon credits. The Government is halving what emitters have to pay by extending the two for one subsidy indefinitely, and agriculture is being removed from the scheme altogether.
“Added to this the low price of carbon in New Zealand, currently less than $5, means that there is little incentive to plant new trees and an increased incentive to deforest and exit the scheme altogether. Submitter after submitter has been telling the Finance and Expenditure Select Committee that unless changes are made the consequences for carbon forestry in New Zealand will be catastrophic.
“Back in April Tim Groser acknowledged these concerns in a speech to the Climate Change Iwi Leaders Group when he promised action in line with Europe and Australia, both of whom have moved to restrict or ban cheap international carbon credits.
“Unfortunately when the changes to the ETS were announced Mr Groser had backed down on restricting international units, apparently in order to secure the vote of ACT leader John Banks who hailed the decision as ‘ACT scores an ETS win for business’.
“In that same press release Mr Banks claimed: “While the government set price for New Zealand units remains at $25, bidding on equivalent units on the European market indicates a price of approximately one quarter of that. ACT wrote to Minister Groser, explaining that such a restriction on imported units would mean that no matter how low the price of carbon credits fell in other countries, New Zealanders would have to pay the NZU price, currently set at $25.”
“Given there is no Government fixed price on NZUs of $25, and that carbon is currently trading at less than $5 in New Zealand compared to $11 in Europe, it is extraordinary that Mr Groser agreed to such an unreasonable and damaging demand.
“Whilst the Minister has broad regulation making powers under the existing law that could conceivably be used to limit the importation of units, the deal struck with Mr Banks makes it clear the Government has no intention of doing so and the message that sends to the forestry sector is that they might as well shut up shop.
“If National is serious about achieving its goal of a 50 per cent reduction in emissions by 2050 then it must make changes to the bill currently before select committee to restrict the importation of cheap international units into our ETS,” said Moana Mackey.