Slowing down the implementation of New Zealand’s emissions trading scheme would be a good move, says BusinessNZ.

Commenting on the Emissions Trading Scheme Review Report released today, BusinessNZ Chief Executive Phil O’Reilly said a slower pace makes sense.

“But the review doesn’t properly take account of the cost burden on New Zealand business and communities at a time of economic uncertainty.

“While the cost increases modelled in the review appear small, they are still costs that will not be borne by other countries not accepting a price on carbon, so the impact on our competitiveness could be significant.

“The review does not place enough emphasis on the international context. The market price for carbon is basically set by the only place where carbon trading is currently happening – Europe. As Europe moves to reduce the amount of permissible emissions, this will force up the price of carbon, making the impact on New Zealand potentially more costly quite quickly.

“And fundamentally, carbon trading can only be successful within a deep and liquid global carbon market, with many countries trading. This outcome is clearly still some time away.

“The overriding need remains to achieve ETS settings that balance New Zealand’s environmental and economic interests.”

BusinessNZ supports emissions trading in principle as the approach most likely to deliver a carbon price into the economy, conditional on actions by other countries including achieving a deep and liquid global carbon market in which to trade, and conditional on ETS settings in New Zealand that balance New Zealanders’ environmental and economic interests.

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