Govt rejects calls to copy Australia in ETS delay

File photo / NZ Herald

Australia's postponement of its emissions trading scheme (ETS) led to calls today for New Zealand to do the same, but the Government did not give way.

The Australian government announced it had shelved plans to start its carbon pollution reduction scheme by July 2011 for at least three years due to parliamentary opposition and slow progress on a global climate pact.

The decision flew in the face of Prime Minister Kevin Rudd's commitment to address climate change, an issue he has previously described as "the greatest moral challenge of our generation".

In Parliament, Act MP John Boscawen called on the Government to "help New Zealand families" by following Australia's lead and putting the emissions trading scheme on hold.

"The ETS will impose a significant, if not crippling, burden on all New Zealanders - especially farmers and exporters," he said.

"It will cause the cost of electricity to increase 5 per cent from July 1 2010 and push the price of petrol up four cents a litre."

Federated Farmers urged the Government to follow Australia's lead.

"Our ETS is based on alignment with our trading partners and frankly that's not happening," said spokesman Lachlan McKenzie.

"Unlike Australia...on July 1 every New Zealander will be caught by an ETS dragnet. It will impact on everything from electricity through to seeing a dentist."

Finance Minister Bill English told Parliament the issues around the emissions trading scheme were complex, and Radio New Zealand reported Environment Minister Nick Smith as saying there were no plans to change New Zealand's ETS implementation dates.

Wellington Chamber of Commerce boss Charles Finny also mounted calls for a postponement, saying he hoped Australia's rethink would be replicated here.

Australia and the United States, whose Climate Change Bill has stalled in recent days, were key trading partners with New Zealand, which would be disadvantaged if it pushed on with its own ETS, he said.

"We are not advocating a do nothing approach, rather we want to move in concert with our major trading partners," Mr Finny said.

"Right now our three largest trading partners have no policy comparable to that which New Zealand is proposing to introduce.

"This means that New Zealand exporters will face increased costs which our trading partners will not."

Green Party co-leader Metiria Turei took the opposite view.

"Any postponement of schemes like this only adds to increasing greenhouse gas emissions, a failure to invest in sustainable options in countries in their domestic areas, it's a real problem in this country, it'd be a real problem in Australia, it's a failed move," she told reporters.

"This Government has based their ETS scheme on buying credits from overseas to cover our failure to reduce emissions, we have enough problems here dealing with just that."

In the US, a fight over immigration derailed plans to unveil a compromise climate change bill.

A bipartisan group of senators led by Democrat John Kerry had been aiming to outline details of their climate change bill today.

That plan was cancelled after Republican Senator Lindsey Graham, a member of the working group, threatened to pull out if Democrats pushed for a debate on an overhaul of immigration before doing the huge environmental and energy legislation.

Without Graham on board, efforts to pass climate control legislation could be doomed, as he was expected to work to win more Republican support for the bill.

In Australia, the Senate is refusing to pass the scheme. It has been rejected twice and a third rebuff is expected in weeks.

Mr Rudd said the government would wait until the expiry of the Kyoto pact in 2012 before pushing on with plans for one of the world's most comprehensive regimes.

Prime Minister John Key this month ruled out delaying the introduction of the ETS, saying despite concerns from businesses the introduction was likely to go ahead in July.

The transport fuels, electricity production and industrial processes industries were scheduled to come under the ETS on July 1.

Mr Key acknowledged that some businesses were concerned but said at this stage the Government intended to "continue as planned". The ETS was being phased in "very slowly", he said.

- NZPA