Aussie ETS dumped, what now for New Zealand?

Federated Farmers Media release

2 December 2009


The Opposition controlled Australian Senate has voted down the Australian Emissions Trading scheme for a second time - 41 votes to 33.  Being a second rejection, it is now likely to trigger a double dissolution election, likely to be held in March 2010.
“The fate of the Australian ETS is now up in the air and all pretence of alignment with New Zealand’s is gone with it,” says Don Nicolson, President of Federated Farmers.
“On 1 July 2010, every New Zealander and every New Zealand business will face increased costs that do not apply in Australia.  Our ETS will erode our competitiveness relative to Australian exporters who won’t face the same price pressures.
“While we’ve been obsessing over our ‘massive’ 0.2 percent contribution to global emissions, in Australia, the focus has been on the A$120 billion cost of its ETS.  The Liberal Leader, Tony Abbott, has called the ETS for what it is, a tax.
“Interestingly, Mr Abbott has written that Australia’s ETS will do nothing to stop global warming.  Australia’s total global share of CO2 emissions is one percent, which, according to him, approximates to the annual growth of Chinese emissions. 
“The independent Pricing Regulator in New South Wales has apparently added fuel to the fire by saying the dumped Australian ETS would have added 30 percent to a power bill.
“This is the sort of scrutiny we’ve totally lacked in New Zealand. 
“Frankly, the costs we’ve been given seem guesses built on hunches within a hypothesis.
“What New Zealand has is one of the most onerous ETS’s in the world.  It captures all gases from all sectors whereas the European ETS captures just 40 percent of European emissions.  The United States intends using 2005 as its benchmark - a year no one else will use. 
“It seems if you are big enough you can do whatever you like.  So why are we not playing follow the leader instead of trying to be a leader no one else will follow?
“I guess the big question is how this will influence what seems to be an inevitable Australian General Election next year.  Yet with 80 percent of Australians not understanding their ETS, according to a poll released last week, the result may end up hardening the battle lines.
“What is for certain is that with higher fuel, electricity, fertiliser, transport and other input costs, we are trusting a New Zealand tax will save the planet instead of research.  That logic totally escapes me,” Mr Nicolson concluded.
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