Tuesday, December 08, 2009

Climate change: Exempting one of NZ's biggest polluters

Last month the government passed a weak emissions trading scheme, which provided billions of dollars in subsidies to polluters. Today we find out that they have exempted one of our largest polluters, the New Zealand Refining Company, even from that weak incentive to reduce emissions.

NZRC emitted 893 thousand tons of CO2 in 2007 - about 1.2% of our total emissions (and from one site - Marsden Point). The reason for the exemption is because they signed a Negotiated Greenhouse Agreement with the government back in 2003, agreeing to improve their emissions intensity to "world's best practice" in exchange for exemption from climate change policies. Unfortunately the deal is secret - the government considers key details to be "commercially sensitive" - but an intensity target means that NZRC gets to increase its emissions while meeting its obligations.

This simply isn't good enough. We should not be exempting large emitters from the ETS (and in effect giving them more than $20 million a year in pollution subsidies). This sweetheart deal does not provide a real incentive for NZRC to reduce its emissions. The only thing that will do that is forcing them to pay their way.