Brian Fallow: ETS will cost our children

Conjurers call it misdirection - calling attention to what is happening over here so that people don't notice what is happening over there.

The focus in recent days on whether some forest-owning iwi are getting a sweetheart deal, or whether it is a pragmatic resolution of genuine grievance, has distracted attention from the larger intergenerational injustice inherent in the emissions trading scheme amendments about to be trundled into law.

What those amendments essentially do is give this message to the sectors - mainly agriculture and heavy industry - which are responsible for about two-thirds of the country's carbon emissions but which face competition from competitors that will not face a cost on emissions:

"Go for your life, ramp up your production of milk, or methanol, or cement, or urea or whatever. The country needs the money you earn. Don't worry about the cost of those emissions. Someone else will pay for almost all of it."

All else being equal, that is a recipe for higher emissions than would be the case if, as under Labour's version of the scheme, they were responsible for the carbon cost of any increase in their emissions above 90 per cent of what they emitted in 2005.

The Government is evasive when asked when it expects New Zealand's emissions to peak.

Who can say? It depends.

It depends how high the international carbon price goes. It depends how ambitious the global agreement to curb emissions is (which amounts to the same thing) and how that burden is shared among countries.

The big unknown, says Climate Change Minister Nick Smith, is to what degree the "intensity-based" approach (which means that for trade-exposed emitters the more you emit the more free emission units you get) will see emissions rise.

Weakening the incentive to reduce emissions in those sectors responsible for the lion's share of them pretty much guarantees that the peak in emissions will be higher and come later than would otherwise be the case.

Which means the subsequent fall in emissions will be more costly.

The deal with the Maori Party yesterday greases the slipway for the launch of legislation which is all about pushing out into the future the costs of adjusting to low-carbon economy.