3 Jul 2012

Govt puts off including agriculture in ETS

10:36 pm on 3 July 2012

Prime Minister John Key says the Government will wait for other countries to follow suit before introducing agriculture into the Emissions Trading Scheme.

The Government has pushed out making any changes to the scheme until another review is held in 2015.

Businesses in the ETS were to face higher costs from 2013, but most sectors will continue to pay half the cost of their emissions.

The Government says it will leave agriculture out of the ETS until at least 2015, despite 47% of the country's emissions coming from that sector.

Climate Change Minister Tim Groser told Morning Report on Tuesday there is no point in New Zealand leading the way if other countries such as the United States and China are doing nothing.

He rejected claims agriculture is being subsidised and said New Zealand is the most carbon efficient major farming country in the world.

Economist Cath Wallace of ECO told Morning Report that not making farmers pay for their emissions is deeply inefficient, unfair and New Zealand has to pull its weight.

Ms Wallace said the scheme is being significantly weakened at a time when the science is calling for urgent action.

Federated Farmers climate change spokesperson William Rolleston said New Zealand farmers have cut emissions by 1.2% per year for the past 20 years.

Exporters say the Government's decision to delay changes to the ETS for another three years means they can remain competitive in international markets.

Export NZ executive director Catherine Beard says that it is important to exporters that New Zealand does not move ahead of other countries on carbon pricing.

"They have to be competitive in global markets. It is very important to our competitiveness that we don't move ahead of other countries (in terms of cost). Outside the European Union, there are no other comprehensive trading schemes."

Right course of action, say parties

ACT and the Maori parties say delaying changes to the Emissions Trading Scheme is the right course of action.

Maori Party co-leader Tariana Turia says the key for her party is minimising the impact on households and keeping increases in living costs down, including heating and fuel bills.

ACT leader John Banks says delaying the entry of agriculture emissions to the scheme until at least 2015 is common sense, as putting bigger costs onto the farming sector would be too damaging to the economy.