Opposition strong on eve of ETS

Climate Change Minister Nick Smith. Photo / Mark Mitchell

On the eve of the emissions trading scheme (ETS) coming largely into effect, Climate Change Minister Nick Smith was still squaring up to opposition and facing calls for the scheme to be reviewed or delayed.

Dr Smith has been travelling the country attending community meetings to explain the ETS first-hand and is holding strong on National's position that it strikes the right balance and ensures New Zealand's Kyoto commitments are being addressed responsibly.

Transport fuels, electricity and industry enter the ETS tomorrow and consumers will face extra costs mainly at the fuel pump and through their power bills as a result.

Opposition parties support an ETS being introduced in some form or other, but the Act Party - despite its partnership with the Government - and some in the farming sector have focused their energies over the past few weeks on campaigning against it.

Dr Smith faced some strong opposition in Blenheim last night as his national ETS drive wound down, and ended up telling a vocal farmer: "If you're not happy with us or believe climate change is a load of nonsense then at next year's election vote for a party that doesn't want an ETS."

He was reminded of that comment in Parliament today by Act MP John Boscawen, but said while there were some climate change sceptics in the crowd, they were a minority.

Dr Smith today reminded New Zealanders that emissions per person here were among the highest in the world and growing at one of the fastest rates among developed countries.

"The ETS is the most efficient and least cost way to bring emissions under control, meet our international obligations and protect New Zealand's clean, green brand."

Dr Smith said the ETS would drive investment in renewable electricity, forestry and energy efficiency and reduce New Zealand's emissions by 19 million tonnes by 2012.

He said the Government was mindful of costs to consumers and a review of the scheme at the end of next year was to assess where other developed countries were heading with their schemes and make adjustments if warranted.

But the Greenhouse Policy Coalition, which represents trade-exposed businesses, said today New Zealand's main trading partners were making little progress on getting their own schemes in place and the chances of getting an international Kyoto agreement settled before 2012 was looking increasingly unrealistic. Meanwhile, many businesses here were put at a competitive disadvantage.

The coalition's executive director David Venables said New Zealand's late 2011 review date was too far away and businesses needed certainty.

"This uncertainty could be reduced by an early and comprehensive review of the ETS. We encourage the Government to signal when the review will proceed and what it will cover," Mr Venables said.

Labour leader Phil Goff was also out and about today pointing out the pitfalls of National's ETS, although his party's scheme would have been more costly overall to New Zealand.

Mr Goff said Labour's ETS would have had complementary measures aimed at reducing the cost impact for families struggling with power and fuel bills.

He said the "fundamental flaw" of National's ETS was because it legislated for significant subsidies to be made available (at a diminishing rate) for heavy polluters which were trade-exposed, the incentive for those outfits to reduce pollution was minimal - something which missed the point of having such a scheme.

Meanwhile, Contact Energy Ltd is rejecting suggestions it is using the emissions trading scheme (ETS) as a cover for increasing prices.

Contact said the ETS would result in an average residential price rise for its customers of 3.2 percent. For an average residential customer this works out at around $62.37 for electricity and $21.87 for gas per annum.

But customers on the company's two winter price promise promotion in Hawke's Bay, Eastland, Wellington and Christchurch will not receive a July 1 electricity increase.

Dunedin customers face a 6 percent price rise, excluding the ETS increase as their price has not moved in 20 months.

The Commerce Commission today warned businesses that they must not mislead consumers about the reasons for price increases.

The commission cited the 2.5 percent goods and services tax increase in October and the debate about power price rises resulting from the ETS.

Prime Minister John Key and some of his ministers have in recent days warned power companies - some of them state-owned - that price gouging in the face of the ETS was not acceptable.

"I'm concerned because some of the power companies are claiming that the emissions trading scheme is the reason they want to raise prices by double digits," Mr Key said today.

"Well that can't possibly be the case, the estimates we've had is at most a 5 percent increase in power prices, and in the majority of cases it will be less than that."

While some companies have signalled retail price increases after July 1 as a result of the ETS coming largely into effect, others haven't.

- NZPA