Public face $1.6b pollution bill under ETS - Labour

Photo / Janna Dixon

Taxpayers could be lumped with a $1.6 billion share of pollution costs under the Government's amended emissions trading scheme (ETS), Labour leader Phil Goff says.

Labour quit talks on the ETS yesterday after the Government made a deal with the Maori Party to advance its scheme.

The new ETS will limit related power price rises and give polluting industries an easier ride and longer to adjust through taxpayer subsidies. Agriculture will now come in two years later, in 2015.

An ETS puts limits on the amount of greenhouse gases different sectors of the economy can emit. Those that exceed the limits can offset them by buying carbon credits from those under their cap, or from those who plant trees.

The Government says under its scheme taxpayers would have to pay $400 million over the next four years to subsidise polluters rather than put all the burden on businesses which could see closures and more job cuts.

However, Mr Goff disputes those figures saying the extended period for subsidies - until 2050 rather than to 2030 as previously set by Labour - would cost more.

"We're now talking about 35 years so he says $400 million extra on New Zealand families for the next three years or so, but that's at a carbon price of $25 a tonne.

"We know if (climate change talks) Copenhagen goes through, it will probably be double that, it may be four times that. You could be talking about $1.6 billion in the first three or four years alone."

Mr Goff said taxpayers were taking too much of the burden.

"What they've done is loaded the cost of pollution on the average New Zealand family rather than on the heavy polluter and they've reduced the incentive on the heavy emitters to reduce their pollution."

Prime Minister John Key said there were some costs to consumers, but nothing compared to what would happen if industry closed down.

"We're out there trying to protect New Zealanders jobs and those industries that are getting some form of protection would otherwise close down," he told reporters.

"I think we've navigated a delicate but nevertheless quite an important path where there is a cost that's been borne by the consumers, that's around about $3 a week. There's costs being borne by business, and I think we've got a nice balance between environmentally responsibility and economic opportunities."

Mr Key said under the previous Labour Government scheme the cost on an average farm would have been $80,000 by 2030, but under National's amended scheme it would be $15,000.

"We've got to think about global food security," Mr Key said.

The Government has a slender majority of 63 votes to advance its scheme and doesn't need Labour or the other minor parties.

Mr Key said Labour did not have to pull out of talks and disputed Mr Goff's claim National had reneged on negotiations.

He said it was "not our responsibility" to keep Labour updated on negotiations with the Maori Party.

"We hope they'll join us...if they don't want to that's their call."

Mr Goff said Mr Key had made his decision. "The decision is not one that we can support".

"We cannot support the proposal in its current form... they could have reached agreement with us, they chose not to."

That meant it was unlikely to be durable.

"We certainly believe what is being proposed in its current form is wrong, that means the scheme will again be subject to change, we tried to give the certainty and predictability - we negotiated in good faith, the bad faith was not on our side."

The Maori Party had not done well out of the deal, Mr Goff said. The party originally opposed the scheme saying polluters were being subsidised too much but that had worsened.

"I think they've sold themselves cheap on this."

Mr Key said the talks with the Maori Party was not part of any deal over other policy.

- NZPA