KEY POINTS:
The Prime Minister plumbed the depths of melodrama yesterday when she likened climate change to the challenges of averting nuclear war last century. Fortunately, the initiatives announced by her Government were more pragmatic. Substantial concessions, not least to farmers and foresters, have been made in pursuit of a viable emissions trading scheme. But probably nothing less would have sufficed, given the urgency of the task and the time already taken to fashion a response.
By opting for a market in carbon credits, in the wake of thwarted tax plans, the Government has fallen in with a worldwide trend. This sees greenhouse gas emissions being capped and breaches being penalised, normally by having to buy credits off those who keep below the cap. Once, this regime was thought to be the answer to this country's 2012 Kyoto Protocol obligations. But the pollution deficit has become increasingly problematic, and the Energy Minister now suggests a near halving of it to 25 million tonnes is the extent of the scheme's ambition.
On that basis, and others, the Greens have condemned it as lacking urgency. In their world, presumably, all sectors would be thrust into the regime together, not, as is proposed, phased in from next year, starting with forestry and ending with agriculture in 2013. The likes of free credits (yet to be allocated) would not be contemplated.
Farmers, indeed, have cause to be grateful. The methane belched by their livestock contributes about a third of the emissions for which New Zealand is accountable under Kyoto. Dairy farmers, especially, will never be more capable of taking financial responsibility. But the Government, mindful perhaps of the "fart" tax debacle, has opted for a softly-softly approach. To justify this special treatment, it says livestock, unlike cars or factories, cannot be redesigned overnight. Maybe so, but farmers can, and must, do more to cut nitrous oxide from fertiliser, which comprises a third of agricultural emissions. Equally, it seems unfair that taxpayers will pay more for research into reducing the amount of methane that cattle and sheep belch.
In seeking consensus, the Government has also bowed to forestry owners, agreeing they can retain ownership of credits planted from 1990. This and other planting incentives are especially significant, given that the rate of deforestation last year grew to its highest level in half a century. Replanting and new planting must be a pivotal part of the response to climate change, a point emphasised at the Apec meeting in Sydney. The Government's rift with foresters was hardly helping this.
The public will, of course, pay a price for the increased costs of those producing greenhouse gases. Petrol is expected to sell for 4c a litre more from 2009, and power bills will increase by 5 per cent a year later. The Government says it will compensate those on low incomes for the increased power prices. But that will do nothing to curb household use. The thrust must be to encourage energy efficiency through the likes of better insulation.
There will also be a 0.1 per cent hit to economic growth. Yet that pales beside the realities of climate change and the advantages of a robust reaction. Placing this country in the vanguard of respondents will reaffirm its clean and green credentials. Additionally, the creation of a healthier environment will benefit everyone. Polls suggest the vast majority of people are willing to accept the challenges posed by climate change. Most will recognise a pragmatic emissions trading scheme as an integral part of the response. Parliamentarians should see the same.
