KEY POINTS:
Climate Change Minister David Parker is facing fire from business organisations over his plan to rush legislation on the emissions trading scheme into Parliament.
Even the leadership panel he has appointed to advise him has deep concerns over issues ranging from the carbon pricing model officials are using through to the effect of climate change policies on New Zealand's economic growth rate.
At issue is whether the Government is on the right track seeking to adopt a "first mover" advantage on climate change - getting NZ's house in order so it won't face a major attack from trading partners.
Or whether it needs to take a bit more time to make sure it's got the modelling right, so that the economy doesn't take a hit when the policies go into effect.
Parker didn't make the first meeting of the 31-strong Climate Change Leadership Forum last Friday, which he has tasked with helping Government develop climate change solutions that will be "durable" and "broadly supported" by the wider community.
The Cabinet minister probably has cast-iron reasons for his absence, but it does contravene statements in Parker's initial press release which his press secretary has yet to provide explanations for.
Nor was forum chairman Stephen Tindall present.
The Warehouse founder, and chairman of the Government's Growth and Innovation Advisory Board, had apparently booked to go overseas for the Rugby World Cup before the meeting was scheduled. No one begrudged Tindall on that score.
His expectations were set out in a letter asking members to extend their focus to the issues, risks and opportunities that New Zealand may face over the next 10-20 years, rather than concentrating "too deeply on near-term minutiae".
"Of course there are some areas where our partners in government are looking for specific feedback - and we will all have particular areas that are dear to our hearts - but the depth of knowledge and clarity of vision you hold offers a real, long term strategic thinking advantage that New Zealand must be allowed to make best use of."
Tindall's letter acknowledged the disparate interests within the group's membership (see table). "But I feel that to varying extents we all recognize 'business as usual' is no longer seen as an acceptable or moral option," Tindall said.
He suggested approaching the meetings with a "spirit of Kaitiakitanga/stewardship in mind."
Business players invited into such high-powered forums are always presented with a difficult choice. Do they get into the tent so that they can exert greater influence for the greater good as Tindall exhorts, or stay outside and push their own organisations' interests without fear they will be seen to be "duchessed"?
Most opt to get into the tent and plug their individual interests elsewhere. But expectations can be difficult to separate on this score. Particularly when an explicit message was conveyed to the group in a presentation at the first meeting that they should "assist the Government" to communicate what is a key plank in its sustainability and economic transformation process.
This is a difficult ask for many organisations to sign up for, as they may not want to be seen as an echo chamber for the Government in next year's election - particularly when they do not believe sufficient time has been devoted to the policy detail and its ramifications for the broader New Zealand economy.
Parker did send a message to the group that he didn't want them there as Government "window dressing".
So Deloitte chairman Nick Main stepped up to the plate in Tindall's absence and coordinated feedback in advance of the meeting, which was held under Chatham House rules.
But it's clear that while the group agreed with the proposition that there should be a "NZ Inc" approach to climate change and the planned emissions trading scheme, there was considerable angst over the "opaque" nature in which policy had been developed, and the intention to rush legislation through before Christmas.
There was general support for the Government's "all sectors all gases" approach, which includes a gradual transition.
But among the "points of concern" are:
* The tight timeframe for core design elements.
* The proposal to phase out adjustment assistance by 2025.
* Economic Impacts - macro-economic modelling.
* Market access and volatility.
* The staggered entry of sectors to the scheme, and liquidity issues for early entry sectors.
* Pre-1990 forests.
* Maori issues.
The forum has established two working parties to address, firstly, the technical aspects of the emissions trading scheme, and, secondly, the evolving international carbon market.
But it faces a tight timetable.
The next meeting takes place on November 8. There is just one more meeting scheduled for December 4, with legislation expected to be in Parliament before Christmas.
Main, who is empowered to speak on the group's behalf, played down criticism, saying tight deadlines concentrated the process. But a number of members have since broken cover.
The Greenhouse Policy Coalition yesterday wrote to Prime Minister Helen Clark warning her that unless there was an adequate timeframe for consultation and a thorough analysis of the economic and social impacts of the scheme, "there is the risk that it will prove unworkable and chaotic, be economically and politically unsustainable, and hence fail to provide any certainty for business".
The coalition is also worried at the Government's announcement last week that it planned to completely ban any new base load fossil fuel (by regulation if necessary) and aim for a 90 per cent renewable electricity sector.
"This is a draconian measure on top of pricing carbon and inconsistent with a market-based strategy. It will undoubtedly lead to investment decline and increased price and security of supply risk."
The peak body's constituents include Federated Farmers, the Major Electricity Users Group, NZ Business Roundtable, Business NZ, the Chambers of Commerce, the Wood Processors Association and the Petroleum Exploration and Production Association.
The notable exception is the NZ Business Council for Sustainable Development, which enjoys an insider relationship with Parker and boasts it has been closely consulted during the policy planning process.
The coalition's concerns need to be addressed.
It reports that the general consensus acknowledged by officials at recent workshops is that a current price of NZ$30/tonne/CO2e is much more realistic than NZ$15/tonne assumptions. It also takes issue with the fact that no regulatory impact statements, cabinet papers or economic analysis underlying the assertion that the proposals will have only a small negative impact on the economy have been released.
This is quite worrying.
New Zealand business needs to be assured that the hard yards are being done for what is such a major shift to our economy.
Who are they?
The Climate Change Leadership Forum:
* Stephen Tindall (chair)
* Deloitte's Nick Main (deputy chair)
* PF Olsen's Peter Clark and Wood Processors chair David Anderson (forestry sector), Meat and Wool NZ's Mike Petersen, Fonterra's Henry van der Hayden and Federated Farmers' Charlie Pedersen (agriculture sector), Contact Energy's David Baldwin and Meridian Energy's Keith Turner (energy sector), BP Oil NZ's Peter Griffiths and Air NZ's Rob Fyfe (transport), Comalco's Tom Campbell, Business NZ's Phil O'Reilly, NZ Business Council for Sustainable Development's Peter Neilson, Wellington Chamber of Commerce's Charles Finny, Council of Trade Union's Helen Kelly (industry), PricewaterhouseCoopers' Julia Hoare and NZX's Mark Weldon (markets and finance), Niwa's Sue Suckling (science and business), Motu's Suzi Kerr, Greenpeace's Bunny McDiarmid and Environmental Defence Society's Gary Taylor (NGOs), Timi Te Heuhue Apirana Mahuika (Maori), Treasury's John Whitehead, Environment Ministry's Hugh Logan, MED's Geoff Dangerfield, MAF's Murray Sherwin, PM's Department's Maarten Wevers and Transport Ministry's Alan Thompson ( Government).
