The New Zealand Government is under increasing pressure from business, farmers and coalition partner Act to delay or at least soften the impact of the emissions trading scheme (ETS) ahead of its introduction in July this year, while the Rudd government in Australia has transferred its emissions trading scheme team into the strife-prone household insulation program, relegating plans for carbon trading this year to the back burner.
By Adam Bennett In New Zealand Herald (7 April 2010):
The New Zealand Government is under increasing pressure from business, farmers and coalition partner Act to delay or at least soften the impact of the emissions trading scheme (ETS) ahead of its introduction in July this year.
Yesterday Business New Zealand chief executive Phil O’Reilly confirmed his organisation was one of a number of signatories to a letter from business groups to the Government in March asking it to delay or alter the entry onJuly 1 of key parts of the scheme.
The Herald understands other signatories included the NZ Chambers of Commerce, the Road Transport Association, the Petroleum Exploration and Production Association, the Major Electricity Users Group and the Meat Industry Association.
Mr O’Reilly said the Government had made it clear its scheme was based on the expectation Australia would have its own ETS in effect before New Zealand and the local version would not cause a flight of capital or labour to countries that did not have carbon pricing.
“We weren’t delighted with the scheme but were comfortable with it based on those predications. They’re no longer there and really the Government needs to be rethinking the nature of the scheme and its impact.”
Mr O’Reilly said Business NZ and other groups, including the Business Roundtable, had suggested three options in their letter: delaying the implementation of the scheme, amending it to give greater protection to emitters facing strong overseas competition, or bringing forward the 2013 review to 2011.
Don Nicholson of Federated Farmers said his organisation did not sign the letter but “would have been very supportive” if given the opportunity.
He indicated that Federated Farmers would continue its opposition to the scheme.
Act MP John Boscawen continued his attacks on the ETS last week in Parliament, saying that although agriculture would not be coming into the scheme until 2015, farmers would suffer significant additional costs from July this year anyway.
“No less than three-quarters of the ETS tax that farmers will pay comes as a consequence of their use of electricity, and petrol and the emissions of the dairy processing factories.”
That could add $7800 a year to the average dairy farmer’s costs.
Climate Change Issues Minister Nick Smith was not available for comment yesterday.
Labour climate change spokesman Charles Chauvel said he was aware of the pressure on the Government because of “rushed amendments” aligning the scheme with Australia’s.
“It will be interesting to see whether it can resist pressure from certain business interests to suspend the scheme instead of amending it to make it better.”
Green Party co-leader and climate change spokesman Russel Norman said suspending the scheme would send a signal to business “that there’s never going to be a price on carbon”.
CER is the Closer Economic Relations agreement between Australia and New Zealand.
By national political editor Simon Kearney in The Sunday Telegraph (4 April 2010):
THE Rudd government has transferred its emissions trading scheme team into the strife-prone household insulation program, relegating plans for carbon trading this year to the back burner.
The team of 154 bureaucrats, who cost taxpayers an average of $370,000 each to plan for the non-existent emissions trading scheme, will instead be put to work sorting out problems with the $2.45 billion home insulation program that left four people dead and has been implicated in 120 house fires up to March 24.
With a budget of $57 million this financial year alone, the public servants are working for the Australian Climate Change Regulatory Authority – an agency that is little more than a name until the legislation to create an emissions trading scheme passes through federal Parliament.
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The Sunday Telegraph has reviewed dozens of contracts let by the department relating to the fitout of the yet-to-be-built building in Canberra and publicity campaigns.
Among them are $22,000 for six coffee machines, $22,000 for 120 stackable chairs and $35,000 for stand-alone air conditioners – the least energy-efficient cooling units on the market.
Hiring for the “phantom agency” – as it has been dubbed by the Opposition – is continuing, with plans to take staffing to 300 by the end of next year, according to Department of Climate Change deputy secretary Geoff Leeper.
Emissions trading laws, officially known as the Carbon Pollution Reduction Scheme, are stalled in the Senate and now face a firm “no” vote from the Opposition.
They laws formed the centrepiece of Prime Minister Kevin Rudd’s response to climate change, which he dubbed the “greatest moral, economic and social challenge of our time”.Not only do the bureaucrats have nothing to do, but Climate Change Minister Penny Wong has not made an official announcement on emissions trading since last November.
Senator Wong denied the entire emissions trading team had been redirected.
She said the intelligence and compliance branch of the Australian Climate Change Regulatory Authority had been temporarily deployed so that it could help with compliance and audit arrangements for the bungled Home Insulation Program.
“The ACCRA group continue to work on the development and implementation of the CPRS and their other compliance/regulatory responsibilities, such as the National Greenhouse and Energy Reporting system and Australia’s Kyoto registry,” Senator Wong said yesterday.
But Department of Climate Change and Energy Efficiency secretary Martin Parkinson, told a Senate committee: “We have redirected the ACCRA group of the former Department of Climate Change – what will become the Australian Climate Change Regulatory Authority in the event that Parliament passes the CPRS bills.”
Dr Parkinson told the Senate committee his department was now an amalgam of the former departments of climate change and environment.
He said the emissions trading team was being redirected into the Home Insulation Program, along with a forensic audit team and a compliance and intelligence branch.
Opposition environment spokesman Greg Hunt said the diversion of emissions trading teams into home insulation meant fixing up the insulation mess had become “the great moral challenge of our time” – a reference to Mr Rudd’s famous line about the climate change challenge.