Editorial: Govt right to stick with Kyoto aims

Transport fuels will come into the emissions trading scheme on July 1. Photo / Richard Robinson

Opinion

The Government is right to carry on with its relatively timid emissions trading scheme.

Australia's Government has lost the political capability to produce an ETS until at least 2013 but that need not change the cross-party support here for a mechanism to cover the costs of our commitments under the 1990 Kyoto Protocol.

Under that international effort to counter climate change, New Zealand agreed to pay if it did not adequately cut greenhouse gas emissions.

As Finance Minister Bill English explained this week, either the taxpayer pays all of that bill or it is shared with emitters and consumers.

One way or the other, we have to pay. This is not a case of simply ignoring the Kyoto commitments and they go away.

Opponents of New Zealand's emissions trading scheme have leaped at Australia's political difficulties to argue that if our biggest trading partner is not making businesses pay for Kyoto promises, then why should we?

The low prospects of the United States pursuing a scheme after the bitter divide of healthcare reform, and in an election year, add grist to that anti-ETS mill.

In both cases there are indeed delays but as both are now signatories to Kyoto they will eventually have to settle on a way of covering their financial obligations.

New Zealand's scheme is already under way.

Under the former Labour Government's law, forestry was first to be covered.

Foresters have planted trees on the promise of securing carbon credits, the upside of an emissions scheme; polluters pay but those helping remove emissions from the atmosphere, like foresters, benefit.

It would be unfair to reverse those gains.

National has already watered down Labour's law, delaying the entry of the transport and energy sectors to keep petrol and power price rises from the worst days of the recession last year.

Those sectors are set to join the emissions scheme in two months.

Price increases will in practice be small, probably lower than the recent rises and falls in a competitive market.

Agriculture, our key exporter, will not be covered until 2015 and then enjoy generous taxpayer assistance to make the scheme's impact negligible for years beyond.

In the meantime, taxpayers will share with consumers and emitters the costs of other, mainly non-exporting industries' excess emissions.

Better that than the total being added to the Government's already sickly books and exacerbating a public debt that must be reduced, not expanded.

Ruinous debt and years of Budget deficits are more of a threat to the business environment than charges levied on a polluter-pays basis.

Business New Zealand yesterday urged business people to make the best of the current ETS and the Government to be open to amending its scheme if circumstances change in a way substantially to disadvantage this country. Ministers seem to be of the same mind.

Unsurprisingly, the Labour Party wants National to hold at least to the current line; a bipartisanship of sorts prevails.

Prime Minister John Key does not face the political threat that has derailed Kevin Rudd in Canberra.

Our main exporters have been sheltered from the scheme's provisions for another decade.

The world has not repudiated the objectives of Kyoto, despite the failure of the Copenhagen summit and scientific shame at aspects of the Climategate email scandal.

Concerns remain over global warming and the potential for long-term, catastrophic effects on the environment, peoples, finances and of course trade. Showing backbone now in holding to small, progressive steps to share the burden is vital.

Mr Key need not worry about being seen to be a leader. Twenty-nine nations already have an ETS.

His goal of being a fast follower is secure, but only if he keeps moving.