Its reaction has not been, as one might expect, "Good on you, George W. What a relief." Instead its chairwoman, Comalco executive Maria Robertson, says the Government should continue its "measured" approach to developing greenhouse policy.
The GPC has a set of criteria that greenhouse policy should meet: in delivering improved environmental outcomes it must protect the competitiveness of New Zealand business, recognise the need for economic growth, provide the certainty that business needs to plan and invest, and be comprehensive, recognising New Zealand's particular and unusual profile of sources of greenhouse gases.
Some of the policy measures being worked on are Kyoto-dependent, notably a trading regime in emissions quota. Support for such a system remains central to New Zealand's international stance.
But other measures do not require international agreement: the "low hanging fruit" of energy efficiency, a carbon tax, negotiated greenhouse agreements with major emitters, and transport policy designed, for example, to relieve congestion on Auckland's roads.
The draft national energy efficiency and conservation strategy released this week holds out the prospect of savings of $900 million a year to consumers by 2012, at today's energy prices, if its target of a 20 per cent improvement in energy efficiency across the whole economy is achieved.
According to the Energy Efficiency and Conservation Authority (EECA), the associated reduction in COinf2 emissions would go about half of the way towards meeting New Zealand's obligation under the Kyoto Protocol to reduce its greenhouse gas emissions to 1990 levels by the period 2008 to 2012.
"Where a quantitative cost-benefit analysis has been possible, the net benefits appear attractive," EECA said. "Most firm measures are estimated to give a return on investment of at least 20 per cent and most yield COinf2 emission reductions at negative cost to the nation, ie, COinf2 emissions reductions can be achieved with a net overall benefit."
Energy use for transport grew an average 3.5 per cent a year through the 1990s and now accounts for 40 per cent of consumer energy use. It produces 42 per cent of New Zealand's COinf2 emissions.
"Pricing transport networks and vehicles to reflect the full costs of use (including environmental costs) would influence investment decisions and short and long-term travel behaviour," the draft strategy says. "Overall this is expected to be a strong and important mechanism to reduce the intensity of energy use. For example, congestion charging would reduce traffic demand at peak times of the day, encourage switching to low energy modes and reduce the time vehicles are operating inefficiently in stop-start conditions."
Which raises the vexed issue of a carbon tax. Its opponents question how effective a carbon charge would be in reducing emissions.
Maria Robertson points to the price inelasticity of petrol, as evidenced by negligible reduction in petrol consumption after very steep price increases last year.
The GPC also cites the problem of "leakage." The Treasury has advised it that carbon taxes could not be imposed on imported goods because World Trade Organisation rules prevent it.
If New Zealand's two cement manufacturers, saddled with a carbon charge, had to compete with imports from countries that lacked such a tax, it might be more cost-effective for the cement industry to avoid the tax altogether by moving overseas, GPC warned in a submission to the McLeod committee, which is reviewing the tax system.
That would be economically harmful but do nothing for the environment.
One of the reasons the McLeod committee has been set up is to confront the long-term implications for the tax base of globalisation.
New Zealand derives an unusually high proportion of its tax revenue from direct taxes, ie, taxes on personal and corporate income. Given the mobility of capital and of skilled labour, there is a prospect of downward international competitive pressure on income and company tax rates, and a corresponding case for an offsetting increase in indirect tax.
Just raising the GST rate risks driving more business underground. A carbon tax, however, would intercept the economy across a wide front, making it easier to meet the broad-base, low-rate test. It is based on physical, metered quantities and so is difficult to avoid.
There is a risk, therefore, that it might be adopted for reasons that have everything to do with tax policy and nothing to do with greenhouse policy.
But the Government has said that whatever the McLeod committee recommends, no significant changes will be made to the tax system before the next general election.
The minister in charge of climate change matters, Pete Hodgson, says New Zealand already has a carbon tax, the excise duty on petrol, "and the world hasn't stopped turning."
"This terror of a carbon tax is simply not rational," Mr Hodgson said.
Herald Online feature: Dialogue on business
Herald Online feature: Climate change
Intergovernmental Panel on Climate Change
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Summary: Climate Change 2001
United Nations Environment Program
World Meteorological Organisation
Framework Convention on Climate Change
