National's Policy On ETS Too Hard On Exporters

Wednesday 9 November 2011, 5:54PM
By Business NZ

The National Party’s announcement that it will slow down the full impact of the cost of the ETS on the economy is like saying instead of moving into 4th gear (full speed ahead) we will stay in 3rd gear a bit longer, when we should have been in 1st or 2nd gear at the most from the start of the scheme, says Executive Director of ExportNZ, Catherine Beard.

“With National’s climate change policy, New Zealand will still end up with a high cost scheme relative to our international trading competitors.

“Many of our trading competitors have accepted no international obligations to reduce emissions, even fewer have trading schemes. Of those that have, they have been very careful to craft their policy response in such a way that it does not put their energy intensive trade exposed companies at risk of becoming less competitive in international markets.

“While some companies have had some allocation of free emission trading units to keep them viable, some of our largest exporters (e.g. food processing companies) have had no allocation at all and have taken on millions of dollars in extra costs.

“These companies were not deemed to be large enough energy users to get an allocation because the test for allocation was based on an Australian threshold, designed for a much more energy intensive Australian economy.

“While that may have worked to adequately protect emissions intensive Australian firms, it has left some of our biggest exporters in New Zealand exposed to a very substantial bill, which will only get bigger with the latest policy announcement.

“The National Party policy statement says we should not get too far ahead of our trading partners on climate change mitigation measures for agriculture – so why would we for industry?”