KEY POINTS:
A high-powered group set up to advise the Government on its planned emissions trading scheme has broadly endorsed its main features.
The Climate Change Leadership Forum has released a summary of its advice - or at least what its 34 members could agree on.
The forum, chaired by Stephen Tindall, brought together business leaders including Fonterra's Henry van der Heyden, Contact Energy's David Baldwin, Fletcher Building's Jonathan Ling, Deloitte's Nick Main and NZX's Mark Weldon, together with the heads of key government departments and representatives of business lobby groups, the union movement, Maori, environmental NGOs and the scientific community.
It supports the principle of an emissions trading scheme to help the economy make the transition to a carbon-constrained world.
And it agrees with the policy of including all sectors and all greenhouse gases. The wider the base the greater the potential for low-cost emissions reduction opportunities to be found, it said.
The forum says a relatively unconstrained ability to import and export emissions units would help to provide liquidity and stable prices in the local market. It does not call for a price cap.
The legislation now before the finance and expenditure select committee envisages large industrial emitters and the agriculture sector being grandfathered, or allocated free units to cover, to 90 per cent of their 2005 emission levels initially. But that shield would be progressively reduced and disappear altogether by 2025.
The forum advocates regular reviews and, if necessary, adjustment to the phase-out to reflect the global regime that emerges for the post-2012 period and the extent to which New Zealand producers' competitors are exposed to a carbon price.
And it suggests the initial allocation of free units within a sector could be on the basis of each firm's emissions per unit (per tonne of cement, say) while staying within a total fixed cap.
