Households pay less in new ETS, says Smith

Nick Smith says some have misinterpreted the Sustainability Council's report. Photo / Mark Mitchell

A report on the amended Emissions Trading Scheme released yesterday by the Sustainability Council showed the changes will more than halve the costs for households and businesses, Climate Change Minister Nick Smith said.

The report said that future taxpayers would be stuck with 84 per cent of the bill for meeting New Zealand's obligations under the Kyoto Protocol over the 2008 to 2012 period.

Only 16 per cent of the cost would be borne by those responsible for emissions.

It would be households and the small business sector that have to pay (at the pump and through their power bills), not the trade-exposed sectors (farmers and big industry) whose emissions will be covered by the taxpayer.

The report by the Sustainability Council's executive director Simon Terry and economist Geoff Bertram says farmers will be subsidised to the tune of $1.1 billion by the end of 2012, while large emitters get nearly $500 million.

Smith said some had interpreted the report as saying households would pay more under the amended ETS.

"This couldn't be further from the truth as the Sustainability Council's report shows."

The report put the cost to households by the end of the Kyoto Protocol's first commitment period in December 2012 at $1.5 billion under Labour's scheme and $637 million a year under National's amended one.

"This is a significant reduction and will reduce the costs on New Zealand families."

The council's report focused on intergenerational wealth transfer.

But Smith said Treasury's analysis had indicated that in 2030 there will be a $2 billion per year difference between the existing scheme and the amended scheme.

"This does not mean taxpayers will be faced with a deficit of $2 billion; it means the Government would only receive a $1 billion a year surplus rather than $3 billion under Labour's scheme."

Smith said the report also confirmed Government concerns that while forestry was offsetting a significant increase in national emissions the numbers become a lot more difficult in the 2020s.

"That is why the Government is focused on obtaining sensible rules under any new international climate change agreement on embedded carbon in wood products."