Climate and taxpayers pay for big business to pollute

Press release - September 20, 2007
Greenpeace welcomed the announcement of an emissions trading scheme intended to tackle climate change, but is alarmed that there are no targets set for reduction of our greenhouse gas emissions and thus no guarantee that emissions will actually reduce - the reason for the scheme in the first place.

"Its bias towards the interests of polluters is a fundamental flaw, meaning windfall profits to their shareholders and big costs to the taxpayer and the climate," says Greenpeace climate campaigner Susannah Bailey.

"To be on track to avoid dangerous levels of climate change, the Government needs to achieve at least a 30% reduction in New Zealand's greenhouse gas emissions by 2020 and an 80-90% reduction by 2050 from 1990 levels.  This scheme won't get us close.  Projected emissions reductions from the scheme fall far short of those required under the Kyoto Protocol." 

"To be effective and fair, all sectors and greenhouse gases should be included, industries should not be subsidised with free permits to emit greenhouse gases, and revenue generated from the scheme should be invested in sustainability projects." 

Yet today, the Government announced that the agricultural sector will be exempt until 2013, and even then will receive the vast majority of its permits for free.

"Every New Zealander will be paying for agriculture's share of the burden. The Government's decision to exempt agriculture means that the dairy sector will be subsidised at a time when they least need it.  Mandatory targets for all sectors are essential in order for significant reductions to be achieved," said Ms Bailey.

Big energy users will also benefit from free subsidies in the scheme, with the cost picked by the New Zealand taxpayer. Free credits will weaken the credibility and effectiveness of the scheme. "Free credits are the emissions trading equivalent of tax breaks.  Every free credit that goes to industry is money in shareholders pockets while consumers not only subsidise the polluting sector through their taxes but also pay increased prices [2].  It is disappointing that the Government hasn't learned from the European Union, who found that free credits offered through phase one of their emissions trading scheme did not provide sufficient encouragement for firms to reduce their emissions." 

The Government should auction permits and use the money raised to assist vulnerable people and help New Zealanders to live more sustainably.

"The establishment of an emissions trading scheme is a step in the right direction, but the current scheme fails to go anywhere near far enough.  As the scheme stands, the agricultural sector and big energy users are the winners and taxpayers and the climate carry the burden.  The Government has picked up the ball on emissions trading, but doesn't seem to have the courage to run with it."

The main problems with the current proposal for emissions trading are:

  • There are no mandatory emissions reduction targets.  There is therefore no guarantee that New Zealand's emissions will actually reduce as a result of this scheme.  Goals for carbon neutrality do not guarantee emissions reductions
  • Not all sectors are included in the scheme from the outset Agriculture will be subsidised by New Zealand taxpayers for the next six years.
  • Major polluters can expect windfall profits under the scheme from free pollution credits
  • Coal exports are exempt as are fugitive emissions from coal mining (although fugitive geothermal emissions are covered by the scheme)

(1) The overwhelming majority of scientists agree that global reductions in

emissions of at least 50% by 2050 are needed to avoid dangerous levels of climate change.  Wealthy developed countries such as New Zealand who are collectively the main cause of the current levels of greenhouse pollution need to reduce their emissions by at least 80 per cent by 2050.

 (2) This has been the experience in the European Union's emissions trading scheme.  The price of goods and services rise to reflect the price on greenhouse gas emissions, and the difference provided by free credits generates windfall profits for polluters.

Other contacts: Susannah Bailey, Climate Campaigner – 021 905 582 Michelle Thomas, Communications Officer, 021 577 556

Exp. contact date: 2007-10-20 00:00:00