KEY POINTS:
An emissions trading scheme would unlock investment of more than $12 billion over the next 10 years and create nearly 10,000 jobs, according to a report commissioned by the New Zealand Business Council for Sustainable Development.
The report by consultancy Sinclair Knight Merz (SKM) was commissioned just two weeks ago.
The business council's aim is to remind MPs considering the ETS legislation that it has an upside to weigh against the risks and costs other business lobby groups and companies have been emphasising.
Some of the assumption underpinning the report's conclusion might raise eyebrows, however.
More than a third of the direct employment predicted would come from a 10 per cent rise in dairy production predicated on 90 per cent of dairy farms applying nitrification inhibitors. But the efficacy of the technology varies widely with soil moisture and temperature conditions and other parameters.
Currently only 5 per cent of dairy farmers use it and an Agriculture Ministry report on the impacts of carbon price in farm profitability judged it more relevant to consider a scenario where 20 per cent took up the technology.
It also counts more than 800 jobs to come in the biofuels industry.
Though they would arguably be the result of the biofuel obligation target rather than emissions trading, SKM says the ETS would underpin them by increasing the competitiveness of biofuels compared with fossil fuels.
Other opportunities it identifies are in geothermal, wind, wave and tidal power.
It also sees a lot of positive benefits in the forestry sector, from the planting of new plantation and permanent forests, the use of wood waste for heat and power, and biochar.
Business council executive chairman Peter Neilson warned, however, that delaying the ETS could not only put those potential gains in jeopardy but put New Zealand at risk of a consumer backlash overseas - if the country was seen as being all talk and no action on climate change.
And it would make it hard to achieve the kind of international regime in which New Zealand's comparative advantage in the emissions-intensity of its agriculture would count for something.
A 1 per cent loss of market share for farm exports would cost 1500 jobs directly and a 1 per cent loss of tourist visits about 500 jobs, SKM estimates.
The business council opposes waiting for the Australians. Although the Rudd Government has said it intends to introduce ETS legislation before the end of this year and have a scheme in operation by 2010, the business council believes slippage in that timetable is inevitable.
BENEFITS AND RISKS
* Even a cursory study identifies billions of dollars of potential investment and thousands of jobs once a carbon price is put into the economy, says the Business Council for Sustainable Development.
* Inaction, by contrast, risked a backlash from environmentally conscious consumers and tourists, who always have an alternative to what New Zealand has to offer.
* And delay implementing an emissions trading scheme would make it harder to get a good deal for the international negotiations on a post-2012 deal, due to be concluded by the end of next year.
