Government moves with caution on Kyoto

By BRIAN FALLOW

The Government has signalled that policies to implement the Kyoto Protocol will recognise concerns about competitiveness and be brought in gradually.

What the Government will do, to whom and how quickly will not be known until it releases its preferred policy package for consultation in April.

But the national interest analysis tabled in Parliament yesterday outlines the principles that will guide climate-change policy design.

One is to achieve sustainable reductions in emissions of greenhouse gases.

But that has to be balanced against the need to avoid "carbon leakage" - that is, avoid policies that would drive industries with high emissions to non-Kyoto countries.

That had long been the Government's position but critics of Kyoto had not taken sufficient account of it, said Climate Change Minister Pete Hodgson.

Along the same lines, "policies will recognise that competitiveness and tomorrow is important for all our industries, including new entrants", the analysis says.

Policy development would be incremental, adaptable, developed in close consultation with "stakeholders" and "build from low-cost policies now to policies that expose emitters to the full [carbon] price, as knowledge and certainty increase, and countries currently without emissions targets take on targets".

The analysis, which concludes that ratification would be in the national interest, goes to the foreign affairs select committee, which will take public submissions.

In the end, though, the decision on whether to ratify is the Cabinet's. The Government has agreed in principle to ratification by September.

Prime Minister Helen Clark told Parliament on Tuesday that the Government intended to move in step with the "broad consensus of western countries".

Mr Hodgson said yesterday that did not mean waiting for the United States or Australia to ratify.

"We need as much time as possible to make the transition," he said.

Implementation of measures to meet New Zealand's obligations would not occur until enough countries ratified - in effect Europe and Japan - to bring the treaty into force.

At that point many countries would be obliged to introduce policy measures and trading regimes that would allow New Zealand to gain benefits to offset the costs involved, Helen Clark said. New Zealand had plenty of time to make the transition. The treaty would not come into effect until 2008.

"The overall economic impact is estimated to be of net benefit to New Zealand," she said.

The national interest analysis cites economic modelling by the Australian forecaster ABARE, which concluded that Kyoto would be slightly positive for gross national product.

And ratification would avoid New Zealand being seen as a free-rider and would be consistent with its clean, green image.

nzherald.co.nz/climate

Intergovernmental Panel on Climate Change (IPCC)

United Nations Environment Program

World Meteorological Organisation

Framework Convention on Climate Change

Executive summary: Climate change impacts on NZ

IPCC Summary: Climate Change 2001