KEY POINTS:
Climate Change Minister David Parker has defended the Government's planned emissions trading scheme (ETS) from criticism it will hurt householders more than farmers and big business.
The Sustainability Council today called for the blanket subsidies now being offered to farmers and other big industries to be dropped and the carbon charges fairly spread over all sectors of the economy.
The council's report - The Carbon Challenge - said farmers and big industries will escape about $4 billion of the $4.4 billion worth of net payments through the ETS up to 2012.
The report said without changes to the ETS householders, road users and small and medium enterprises will pay 90 per cent of the money required by the scheme up to 2013 - even though they will generate only a third of the nation's greenhouse gases in that time.
Mr Parker said bringing agriculture into the scheme by 2013 would be a world first and to do it quicker could harm the economy.
Phasing in different parts of the economy was important to reduce harm, he said.
The report called for the Government to ditch its proposed new carbon "currency", the NZU - equivalent to about one tonne of carbon dioxide emissions - and instead use the existing international carbon currencies established under the Kyoto protocol.
Mr Parker told Radio New Zealand that this was worth looking at and he disagreed with suggestions that the scheme would do little to reduce overall emissions.
The report said householders and small businesses would be hit hardest by the ETS.
The $4 billion paid by these groups will include $2.8 billion in charges on emissions and $1.2 billion in "windfall profits" to generators of renewable electricity. These electricity generators will collect a total of $1.8 billion in windfall profits.
The report said farmers and the rest of the agricultural sector will also pick up a net subsidy of $1.31 billion up to 2013.
The existing scheme meant that when foresters are gifted 100 million NZUs, selling them will earn a cash reward of $3 billion, while big industries, gifted 45 million NZUs, are effectively being paid a covert subsidy to provide a rebate on their energy bills.
- NZPA
