Green Times

Legislation at the heart of the Government’s climate change strategy is being savagely criticised by big companies, who say it will cost the economy billions of dollars.Fonterra, Solid Energy and Todd Energy lined up at a select committee hearing yesterday to leave MPs in no doubt about their concerns over the Climate Change (Emissions Trade and Renewable Preference) Bill.

It sets up an emissions trading scheme (ETS) which will eventually make all sectors of the economy face limits on how much planet-warming greenhouse gas they emit, and pay for each tonne of carbon that is over those limits.

It has already faced severe criticism from business organisations and yesterday’s submissions were even stronger.

Fonterra said that by 2030 the ETS would cost it $500 million a year. It would lose its competitive edge and the economy would be $2.7 billion worse off.

Chief executive Andrew Ferrier told MPs the dairy sector should be exempt because it could do nothing to reduce methane emissions from animals.

“It makes sense that we only include these gases in the scheme when we have the ability to reduce them.”

Solid Energy, the State-owned coal mining company, said that depending on the price of carbon the Government could reap windfall gains of up to $80b by 2030 as polluters were punished for their emissions.

Chief executive Don Elder said the bill was “the most far-reaching taxation legislation since the 1980s” and was laying down conditions 22 years into the future.

Climate Change Minister David Parker said he “fundamentally disagreed” with the scenario Solid Energy presented and said the Government would never allow it to happen.

Changes would be made under reviews provided for in the bill if such “extreme” prices for carbon were ever reached, he said.

Todd Energy said the Government had not properly explored the potential risks to the economy.

Managing director Richard Tweedie said the legislation had been prepared in haste and ad hoc amendments were already being made, even while it was in front of the finance and expenditure select committee.

The three companies want the legislation put on hold, or changed so that solutions can be thrashed out over time.
Source: Stuff.co.nz, New Zealand