Friday, September 11, 2009

Climate change: Chauvel on the ETS

Labour climate change spokesperson Charles Chauvel gave an interesting speech about the ETS to the NZ Oil and Gas Summit in New Plymouth yesterday. It's well worth a read. In it Chauvel outlines Labour's position on the ETS: while they obviously prefer the existing scheme which they passed prior to the election, they "accept that National and its supporters have legitimate expectations that the scheme will be changed" and are willing to work with them to adjust the parameters of the scheme to get an ETS backed by a broad majority. At the same time, there are also core principles that they are not willing to compromise. Chief among these are environmental credibility and fairness. The former requires that our largest polluter, agriculture, is included in the scheme, and that the total amount of credits in the scheme be capped rather than being allowed to grow with pollution. The latter requires that price caps and assistance to "at-risk" firms to prevent job losses or carbon leakage be both short-term and subject to a legislated phase-out, rather than being an ongoing subsidy from the taxpayer. If National insists on a scheme which does not meet these criteria, and instead provides an ongoing incentive for polluters to continue to pollute, they are happy to walk away and let the government try and find a majority with the Maori Party (who are even more hardline than Labour) or ACT (yeah, right) instead.

This puts the ball very clearly in National's court. And while John Key has threatened to turn to ACT to abolish the ETS entirely, Chauvel points out that that would have significant consequences for our international reputation, our economy, and our "clean and green" image (which as Minister of Tourism Key now owns). National's only sane option is compromise. And hopefully they will do it sooner rather than later.