Industry chases greenhouse deal

By BRIAN FALLOW

New Zealand's biggest corporate users of energy seem to be making headway in their bid to convince the Government that they should be able to negotiate their own deals to reduce emissions of greenhouse gases.

Energy Minister Pete Hodgson told the Greenhouse Policy Coalition yesterday that the Government was investigating the possibility of negotiated greenhouse agreements as part of a package of measures to be brought in before 2008.

The significance of that year is that if the Kyoto Protocol on climate change is ratified, as the Government intends doing, it would be a commitment to reduce net emissions of greenhouse gases to 1990 levels on average, between 2008 and 2012.

"From a Government perspective any scheme would need to be transparent and credible, especially if participation implied a degree of exemption from other potentially costly measures," Mr Hodgson said.

"Clearly, industry would need to consider it worthwhile to go to the effort of participating and undertaking pre-2008 actions.

"This is one reason why the Government has agreed that participation in such a programme would not disadvantage firms in subsequent or parallel policy initiatives."

The members of the coalition represent 10 per cent of gross domestic product but account for a third of the country's greenhouse gas emissions.

They are spread across the cement, aluminium, steel, methanol, forestry, dairy, oil, gas and coal industries.

Comalco executive Maria Robertson, who chairs the coalition, said the British Government, which is bringing in an energy tax from April, had negotiated deals with energy-intensive sectors exempting them from up to 80 per cent of the new tax in exchange for progress on reducing emissions.

Lawyer Mai Chen, who advises the coalition, said business had to be satisfied that it would not suffer a double jeopardy.

It needed to know that if it agreed to measures that would give the Government early gains in reaching its greenhouse targets, it would not be subject to a carbon tax later.

"A carbon tax is one of the tools in our toolbox and we will not agree to forgo it," Mr Hodgson said.

"We may or may not use it. We haven't decided.

"We have made it clear that if we decide we want one we won't introduce a carbon tax until after the 2002 general election."