John Armstrong: Arrival of ETS an anti-climax

Easy-to-knock scheme very hard for Labour to knock over. Photo / APN

Feeling the financial pinch from the Emissions Trading Scheme? Didn't think so.

Admittedly, it is still only Day Three. But, as is so often the case, when the big moment finally arrives for something of such monumental importance to at last grind into life, having been thrashed to death for months (or years, in this case), there can be an acute sense of anti-climax.

Thursday's "introduction" of the ETS - it is really an expansion of a scheme which until now covered only forestry - proved to be even more of a non-event despite last-minute doomsday-style warnings from the scheme's opponents about its impact on households and small businesses.

On the home front, the scheme may well be unfair. It may well increase the burden on the taxpayer, rather than the emitters. It will most surely have little immediate effect in cutting New Zealand's levels of greenhouse gas emissions.

For most people, however, the hideous complexities of the scheme are far removed from their daily lives. Where it matters is where it bites. But it is hard to get much news mileage out of $3.17 - the initial cost per household a week.

Therein lies the problem for critics of National's revised ETS. It may have more holes than the proverbial Swiss cheese. But while it is easy to knock the scheme, doing so in a way which resonates beyond the climate change cognoscenti to the wider public is proving extremely difficult.

Put that down to John Key and Nick Smith, National's environment minister, who have well understood the risks an ETS poses for National and reacted accordingly with what might be described as a "lowest common denominator" scheme.

They have come up with the greenhouse gas emissions-cutting equivalent of mass-marketed fast food. In short, the ETS is bland and non-threatening. No one admits to admiring it. No one is getting enthused about it. But the vast majority can live with it.

National's rewrite of Labour's original scheme ticks all the right political boxes - if not the climate change ones. It protects jobs. It has (so far) a low impact on households. It keeps New Zealand onside with green-tinged consumers in important export markets. It shows National is not the total environmental vandal that its mining policy would suggest.

And it trumps Labour. Rather than next year's election being fought in part on Labour's "scheme" versus National's "no scheme", National will make it a battle over whose scheme hits the voter the least in the pocket. As is his wont, Key has pitched the scheme to sit comfortably with mainstream opinion which wants a scheme but is less willing to pay for one that really does the job. National reckons that view is held by roughly 80 per cent of the electorate. Another 10 per cent don't think the new scheme goes far enough, while the remaining 10 per cent are fiercely opposed to any ETS at all.

That leaves Labour with a tricky choice. It either accepts National's anodyne scheme - or it goes for something tougher which might bring praise from a few but will hurt many more financially.

If it does the latter, it will undercut its efforts to hammer National on the wave of GST-related and other price hikes hitting households.

National is vulnerable too. While farmers have been vociferous in objecting to extra costs they cannot pass on, senior ministers have made a calculated gamble that regardless of what they might be saying now, farmers will stick with National because they really have nowhere else to go.

Key's and Smith's jobs have been made easier by the unco-ordinated and consequently feeble opposition to the ETS in rural and provincial New Zealand

That was amply displayed by the anti-ETS march on Parliament around 10 days ago. It numbered barely 90 or so. The pathetic turnout would have only hardened the Government's resolve to stand its ground.

Still, many farmers remain angry. The Government's refusal to put the ETS on hold has prompted threats to resign from long-serving members of the National Party. There has been talk of setting up some kind of "country" or "farmers" party. Such a party is doomed to failure. But it could damage National. While having no hope of reaching the 5 per cent threshold, it would split the centre-right vote. Its votes would be wasted votes and not counted, thereby reducing the centre-right's overall share of the vote and consequently making it just a little more difficult for National to stay in power.

It would be truly perverse if farmers backed a party which ended up helping Labour which brought in a much tougher ETS than National's.

National's hierarchy sees these threats for what they are - threats. They reflect the hurt of those upset that "their" party is implementing an ETS.

But those making the threats will remain loyal. That is borne out by Act's failure to pick up any extra support despite the marathon on-the-ground efforts of one of its MPs, John Boscawen, to force a delay in the ETS.

Act has been part of a quirky informal alliance alongside Federated Farmers and, more recently, Family First. Federated Farmers, however, is wary of getting too close to a political party. It did not invite Boscawen to its annual conference last week. But it did invite Goff and Key to speak. Key astutely made himself available for two hours to defuse any ETS-inspired backlash. He need not have worried. The message from the federation's leaders was that while National was doing one major thing wrong, it was doing a lot of other things which were helping farmers.

Lost in all the noise has been the fact that the Government has listened to the farmers' pleas and responded accordingly. Smith has promised that agriculture's inclusion in the scheme - scheduled for 2015 - will be further delayed unless New Zealand's export competitors have progressed similar greenhouse gas cutting regimes. Likewise, the second stage of power and fuel increases in 2012 may also go on hold.

Nevertheless. the Government was always going to go ahead with an ETS in some form, not least because of its manifesto promise that those planting trees would receive carbon credits.

Of more note, however, is the Government's view that the current international hiatus in climate change policies is borne of the global recession and therefore only temporary.

It firmly believes something had to be done to safeguard the country's export trade - or New Zealand would otherwise face mounting consumer resistance to goods transported from afar.

Farmers - amazingly - have seemed to be blinkered to this danger to their livelihoods. They have poured scorn on what Smith calls a "soft" ETS when they should actually have been supporting it. They won't get a better deal.

The bottom line is that whatever farmers think about the veracity of climate change is irrelevant. It is what the consumers of New Zealand's export products believe that matters. They have choices. They call the shots. Yet, yesterday, Federated Farmers was calling for next year's review of the scheme to be brought forward.

It seems the penny is taking an awfully long time to drop in that neck of the woods.