Lack of global market hampers New Zealand’s emissions trading scheme
New Zealand’s emissions trading scheme would be fit for purpose if there was a deep and liquid global carbon market, but the existence of such a market is increasingly unlikely in the medium term, says BusinessNZ.
In its submission to the ETS Review panel, BusinessNZ says there has not been much progress towards a global climate change agreement and little action by other countries to price carbon transparently and without offsetting subsidy policies.
As a result, removing the protections for consumers and businesses from the ETS in 2013 as scheduled is unlikely to be in New Zealand’s best interests.
“More action by other countries is needed to keep New Zealand’s action proportionate to its fair share,” said Phil O’Reilly, BusinessNZ Chief Executive.
“A new balance needs to be reached between the environmental benefits and economic consequences of the scheme.”
BusinessNZ’s submission to the Emissions Trading Scheme Review Panel is under ‘submissions’ on www.businessnz.org.nz
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.