Cost of doing our bit to save the planet: about $5 a week

By BRIAN FALLOW

The Government's global warming policy is likely to cost households $5 a week.

The expense would result from a carbon tax the Government proposes to curb greenhouse gas emissions.

The tax would not come into effect for at least five years and would be capped at a rate that would add no more than 6c a litre to petrol and 7c to diesel and boost residential power bills about 9 per cent. All up, about $5 a week for a typical household.

Farmers would not face a carbon tax on the greenhouse gases emitted by belching sheep and cattle or from agricultural soils, because they can reduce emissions by cutting stock numbers only. But the agricultural sector would be expected to spend $20 million a year on research into reducing emissions.

The forestry sector would get a "no gain, no pain" deal.

The charges are part of the Government's policy to meet the targets of the Kyoto Protocol, which it expects to ratify in August.

"We are likely to be about the 20th developed nation to do so," Energy Minister Pete Hodgson said when announcing the policy yesterday.

The Government would retain ownership of the "sink credits" New Zealand receives under the protocol. These are credits for the carbon dioxide taken out of the atmosphere by forests established since 1990, so there would be no windfall for farm foresters who own most of those trees.

On the other hand, owners would escape liability when they cut down their trees, whether they replant or not. Both the asset and liability created by the protocol would rest with the Government.

Smokestack industries such as steel, aluminium, cement and pulp mills, which are at risk of becoming uncompetitive if they face a one-size-fits-all carbon tax, would be able to negotiate separate agreements with the Government.

The policy, up for consultation, would satisfy New Zealand's obligations under the Kyoto Protocol.

Environmentalists slammed the package as bowing to business lobbying and said it would do virtually nothing for the environment.

The Engineers Union, many of whose members fear for their jobs, welcomed the package.

The Greenhouse Policy Coalition, which represents energy-intensive industries, said it was pleased the Government had listened to the concerns of business.

"However, the reality is New Zealand is still taking on burdens that will not be shouldered by Australia, the United States and other nations with whom we compete," chairman Chris Baker said.

The crucial decision is for the Government to retain ownership of the forest sink credits.

There should be more than enough of them - 30 to 50 per cent more than New Zealand would need to cover any increase in emissions over 1990 levels, which is the cap it accepted when the protocol was negotiated in 1997. Growing trees are increasing the amount of CO2 removed from the atmosphere faster than the increase in emissions.

This gives the Government the opportunity to shield businesses from the cost of their emissions, at least for the next 10 years, and it has taken it.

The National Party said it would review the ratification of the protocol if it won the election, although leader Bill English said it was unusual for an incoming government to consider revoking such a commitment.

"It has been clear, all along, that [Prime Minister] Helen Clark has been absolutely determined to get her international photo opportunity and ratify Kyoto in August - no matter what the cost to New Zealand's economy," Mr English said.

"Despite the pretence of public consultation, the process has been a sham, with the Government committed to signing ... Kyoto before any major cost analysis was done."

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