To John Key from Sally M 2 May 2010

Dear Mr Key,

The article in the Sunday Star Times by Finlay MacDonald is so true, but I dare say you will pass his observations off as a ‘spoof.
'Nanny' gets a fresh pair of bloomers and sensible shoes"
 "No, the old girl is alive and kicking – it's just that her petticoats are blue now, not red."

I have Attached an article printed in the local paper alerting the public to just exactly what ‘your’ Emissions Trading Tax Scheme means to the people. It is a travesty that you continue with ‘your’ ETS scheme. Why you as Prime Minister will not open your eyes and see the ramifications for all New Zealanders with your zest in continuing to have ‘your’ ETS scheme and the stupidity of having New Zealand as the only country in the OECD that includes agriculture.

At first 'your' ETS will only include energy (electricity, petrol and diesel) but by 2015 it will include ruminant animals. Sheep and Beef farmers will then start paying an estimated $5000 (not the $3000 you so glibly told farmers) increasing to an charge of $10,000 for an average farm annually. An average dairy farm is estimated to be double of these.

Your tax is going to inflict huge costs on the people of New Zealand that will greatly affect the middle and low income people.

Let me tell you something about the Gore District




The average wage is $22,400 (NZ $24,400)

The median age is 40.5 years (NZ 35.9)

16.8% of people are 65 years and over (NZ 12.3%)

21.1% of people are under 15 years (NZ 21.5%)

The population in Gore has been falling over the last 10 years and decreased again at the 2006 Census by a further 2.8%

To get the accommodation supplement Gore is rated Area 4 and receives approximately 56 to 64% less than an Area 1 location. More power and heating is required in the deep South, but this fact is not recognised by the elite who rule Wellington.

Prime Minister, just where do you think the extra money will come from to fund ‘your’ ETS taxes?

There will be less money available from the farming community who in turn will spend less in our towns, again affecting middle and low income folk.

You may not know it but farmers are at the end of the crazy cost plus run away syndrome. We are not able to pass increased costs onto any one else.

As well less funds will be available for investment into science and technology.

The warnings are that NZ producers are already under threat with our low cost production methods.


With the current financial stress many farms are suffering 'your' ETS taxes may be the undoing of pastoral farming in New Zealand, with the greatest damage to the sheep and beef farmers.
Sally M
Dear Members of Parliament
I am forwarding to you part of an email I sent to the Prime Minister on Sunday. I believe the issue of your stance on proceeding with the Emissions Trading Scheme tax on the 1st July will bring hardship for New Zealand families, their communities, businesses and the farming sector.
I apologise for sending the same email to each of you, but time does not allow me to write an individual message.
Sally M



Dear Ms M.......
I refer to your email of 3 May in which you ask that implementation of the Emission Trading Scheme be delayed or abolished.
The government has carefully considered this issue, following on from the amendment to the ETS Act last year. This amendment substantially reduced the impact of the ETS as introduced by the previous government.
The government has concluded that the best course for New Zealand is to continue with the implementation from 1 July 2010.
There are four fundamental reasons why we are doing this:
  1. The ETS is a major promoter of planting new forests which reduce the impact of climate change. In the next 12 months the government will pay $1.1billion to foresters, in the form of emissions credits for forests planted since 1990. This is leading to significant new planting, after several years of net deforestation. Deferring the ETS would mean revoking these property rights.
  1. The impact of the ETS on households and businesses is relatively modest. For instance, the typical household will have a cost of $165, which compares to $330 under the previous Labour government’s ETS.
  1. The EU, which covers 29 of 37 developed countries, have an ETS. Other countries such as the US also have climate change measures such as tax credits for renewable energy and fuel efficient cars.
  1. There will be a review in July 2011. If there is no further international progress, we will continue with the current level of ETS rather than increase to the full cost which is planned for 2013.
I also enclose a Q&A which provides more detail, especially how the ETS will work in practice.
Yours truly
Wayne Mapp
Sent on behalf by Joanna Wilson
Ministerial Secretary


Questions and answers about the
New Zealand Emmision Trading Scheme (ETS)
1)         Why do we have an Emission Trading Scheme (ETS)?
The ETS is designed to reduce the harmful effects of climate change by encouraging business and consumers to reduce carbon emissions. The intention is to reduce New Zealand’s carbon emissions as New Zealand’s contribution to the global effort to keep the global temperature increase below 2°C. The scientific consensus is that an increase beyond 2°C will lead to more severe storms, reduced agricultural output, loss of biodiversity and increase in sea levels by one metre within the next 60 years.
The ETS is therefore intended to:
·         Demonstrate to the international community that New Zealand is carrying its share of the burden to minimise carbon emissions, and encourage the planting of forests.
·         Encourage businesses to reduce carbon emissions.
·         Ensure that climate change issues do not become obstacles to the export of New Zealand’s primary products, especially to Europe.
2)         How does the Scheme work?
The ETS is intended to incentivise the reduction of climate warming gases (for example CO² and methane). Emitters of greenhouse gases have to buy carbon credits. These include  large scale industry such as steel mills, cement manufacturers, coal or oil fired power stations and transport, fuel producers. In contrast, forestry locks up carbon in the plant matter. This means foresters generate carbon credits, which they sell to emitters. A carbon market has to be established to enable the sale and purchase of the credits and debits.
3)         How does an ETS help reduce climate change?
The ETS is intended reduce climate change by putting a price on carbon and providing a price incentive. Consumers and business will look for products and services that are energy efficient, have used less carbon to produce, or will emit less carbon in their use. As an example, there should be a competitive price advantage for fuel efficient vehicles and appliances, either in their acquisition or in their life cycle fuel costs.
4)         How does the ETS affect consumers?
Consumers will pay more for petrol and diesel (the fuel producers pay the cost of purchasing the carbon credits). The cost will be 3.5c per litre. Consumers will also pay more for electricity (electricity companies producing power from coal and gas have to buy credits). The cost will be around 1.2¢ per kwh. Since most goods and services include power and fuel inputs there will be a modest increase in the cost of living. This will be around 0.4% in inflation, as a one off increase. On average the cost per household will be $165 a year.
5)         How does the ETS affect business?
Businesses will also have increased power and fuel costs, which they will pass on. Some large scale industries will also have to buy carbon credits as a result of their carbon emissions. These include steel mills, cement mills, thermal electricity power generators, and oil companies producing petrol and diesel.
6)         How does it affect farmers?
Like everyone else, farmers use electricity and fuel, so this will be an increased cost. The cost from 1 July will be approximately $2200 for an average dairy farm. From 2015 farmers will have to account for greenhouse gas emissions from farms, mostly methane from animals. Fonterra and the meat processing companies will participate in the carbon market on behalf of individual farmers.

7)         How does forestry benefit
Forests lock up carbon as they grow. Therefore the owners of forests are able to generate carbon credits which they can sell. In the first 30 years of a forest the value of the carbon credits per hectare is $20,0000, based on $25 per tonne of carbon. The credits are sold to large scale industry emitters through the carbon market.
8)         What is the overall cost of the emissions trading scheme
The overall cost to consumers and businesses of the emissions trading scheme in the first year will be $400 million. However, in the first year the government will allocate $1.1 billion in carbon credits to the forestry sector. By honouring commitments to give credits to the forestry sector, and by softening the costs to consumers and businesses, the Government will be making a significant loss on the emissions trading scheme.
9)         Who participates in the carbon market?
Only large scale emitters of carbon and generators of carbon need to actively participate in the carbon market. Consumers and the vast majority of businesses will not participate in the carbon market. However, consumers and business will be able to reduce the impact of increased fuel and power prices and other prices by acquiring fuel efficient vehicles, energy efficient appliances and choosing goods and services which are carbon efficient compared to competitor products.
10)       When does the ETS come into effect?
In July 2010 the ETS comes into effect for power generation, transport, fuel production, and large scale industrial emissions. In 2015 agricultural emissions will be included. These are all emitters and therefore they incur costs in purchasing carbon credits. Forestry (which produce credits) has been in since 1 January 2008. The sale of these credits will create income for the foresters.
11)       How will the ETS be phased in?
From 1 July 2010 to 1 July 2012 the price of carbon will be capped at $12.50 per tonne. That means average households will pay $165 per year, and a typical farm will pay $2200 per year. For industrial emitters the emissions the level of assistance will be 60 per cent for moderately emissions-intensive activities and 90 per cent for highly emissions-intensive activities. These will phase out at 1.3 per cent a year from 2013.  The cost of the ETS is therefore only gradually imposed on large scale industrial emitters. For agriculture, which comes into the system from 2015, there will be free emission units allocated on the same basis on high emissions intensive activities.
12)       Who else has an ETS?
The European Union has had an ETS since 2004. Ten US states have carbon markets. Tokyo Metropolitan Government just proposed an Emissions Trading Scheme for Tokyo. The Federal US government is proposing an ETS, as are the Japanese, South Korean, Canada and Mexican governments.
13)       What other things are being done to reduce greenhouse gases?
A number of car manufacturing countries have rules on fuel efficiency for vehicles. Many countries have financial initiatives (paid out of taxes) for renewable power generation; notably Australia, the United States and the European Union.
13)       Will the ETS be reviewed?

The ETS is reviewed in 2011, and every five years thereafter. The review will take into account international agreements. This will ensure New Zealand’s position in dealing with climate change is broadly comparable to other trading partners, and with other developed nations. If other countries, such as Australia, have not made moves to bring in an ETS then the Government is unlikely to increase the obligations on at risk industry or on consumers.

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