New Zealand laws to enact an emissions trading scheme (ETS) next year look set to pass parliament this week after the National Party government struck a deal with the indigenous Maori Party to support an amended ETS bill. It’s also crunch time for delayed emissions trading laws in Australia where the government this week will force a second Senate vote on its proposed scheme.
In New Zealand, the conservative National government has amended the ETS first passed by the Labour government last year and then put on hold when Nationals came to power. The changes create a longer phase-in period for big emitters before they must pay the full cost of their emissions.
Negotiations with the Maori Party began back in September but have only now been finalised as the government looks to pass the bill by the end of the week, in advance of the Copenhagen climate conference. Stiff opposition is expected in parliamentary debate but Maori support will give the government the numbers it needs when it comes to a vote. The government has already announced a 2020 emissions reduction target of 10 to 20 per cent below 1990 levels.
The Maori Party deal will see a further $24 million spent on insulating low income households, consultations with Maori on the ETS bill’s regulations, a review of tree-planting incentives and Maori groups win the right to forest 35,000 hectares of crown land and claim the carbon credits.
Under National’s original amendments, a transitional phase will run from July 2010 until the end of 2012 where the transport, power generation and industrial sectors will only face obligations for 50 per cent of their emissions with an option to pay a fixed price of $25 per tonne of CO2e. In 2013, the scheme switches to full liability for those sectors. The compensation payments to households for higher power bills have also been increased.
The political deal in New Zealand comes in the same week as the Labor government in neighbouring Australia draws a line in the sand to resolve its own parliamentary stand-off. It wants to finalise a deal with main opposition conservative party, the Liberals, to pass the Carbon Pollution Reduction Scheme (CPRS) this week to start in mid 2011.
New Zealand has been keen to see its scheme harmonised with Australia’s CPRS to widen the carbon trading opportunities for its emitters and lower compliance costs. But unlike the NZ ETS which brings agriculture into the scheme in 2015, Australia’s scheme would now exclude agriculture permanently.
The Liberals are the government's only hope to gain the numbers required in the Senate. But the party is deeply divided on climate change and support for the CPRS, and must thrash out a position between a pro-climate-action leadership and a significant minority of climate-skeptic MPs.
NZPA, TVNZ 23-24/11/09
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