The date for sending in a submission on this issue has passed.
Have your say on New Zealand's Emissions Trading Scheme
A Green Party Submission Guide for the Climate Change Response (Moderated Emissions Trading) Amendment Bill
The Government is moving fast to emasculate the already weak ETS and turn it into a subsidy programme for big polluters.
You only have until Tuesday 13 October 2009 to have your say.
What to say
We recommend that at a minimum, you include the following points.
Say you OPPOSE the Climate Change Response (Moderated Emissions Trading) Amendment Bill and that you:
- Oppose intensity based allocations of free credits without a limit; (this is the most important)
- Oppose a price cap on carbon, even for a short period;
- Oppose the 2 for 1 carbon credit deal for big industries;
- Oppose the never ending, slow phase out of free allocations;
- Oppose further delays for agriculture's entry;
- Want the carbon measurement of indigenous forestry fixed, based on existing science;
- Support all of the Parliamentary Commissioner for the Environment's recommendations, particularly the full and transparent publication by the Auditor General of the number and value of all allocations (free or otherwise) distributed under the scheme.
- Support the inclusion of an appropriate Treaty clause in the legislation;
- Support fixing the wilding pines problem;
- Support the new categories for agriculture to allow farm level participation for different agricultural sectors to start at different times;
- Support having targets in legislation, but pointing out that 50% by 2050 is not nearly enough to stop warming;
- Any other issues you have identified that are important to you.
More information on these below
Submission format
The most important thing is that you make a submission, no matter how brief. The Committee Members are not experts and they are not expecting you to be one either. Speak from your heart and your mind, and be succinct where you can. If you have references, list them.
Just write your submission as a letter including:
- Your name, address, phone number and email address
- State that you WISH TO APPEAR before the select committee to speak to your submission - you can always decline later.
- Give an indication of who you represent (e.g. landowner, business owner, community group member, yourself or your family, etc). If you represent a group, outline its purpose and how many members it has.
- Clearly state your OPPOSITION to the Bill.
- Outline your key concerns about the Bill clearly and concisely, using examples.
- If your submission is long, include a summary at the beginning, number the paragraphs, and attach any supporting evidence as appendices.
- Your submission can be as short or long as you like, but it is more effective if you write it yourself, rather than just sending in a form submission.
If this is your first time making a submission to a select committee this official guide will help: Making a Submission to a Parliamentary Select Committee (167kb PDF)
If you'd like help with writing, copying or submitting, please contact:
Rick on 04 817 6789 or rick [dot] leckinger [at] parliament [dot] govt [dot] nz
Where to send your submission
There are three ways you can send your submission:
- Submit using the online submission form.
- Email your submission to select [dot] committees [at] parliament [dot] govt [dot] nz
- Mail it. Send two printed copies of your submission to:
Committee Secretariat
Finance and Expenditure
Parliament Buildings
Wellington
Phone: +64 4 817 6752
Fax: +64 4 499 0486
Your submission must be received by the Finance and Expenditure Committee by Tuesday 13 October 2009.
Jeanette's Fact Sheets
You don't need to read these factsheets to make an informed submission. They are included for those who want more information about why NZ would want an ETS in the first place. This Submission Guide is more current than the third fact sheet.
How does New Zealand's 2008 ETS law work?
How is the National-Maori Party proposed ETS different, and what is wrong with it?
Details we recommend you cover
It is not a requirement but it is easier if you submit on specific sections/clauses within the Bill, as the Select Committee's job is to amend the legislation based on submissions.
- Oppose intensity based allocations of free credits without a limit; (this is the most important point to make)
Sections 81, 82, 83, 85, 85A, 86, 86A all deal with how free allocations are given to industry and agriculture. While you do not need to comment in detail about them, mention that they need to be amended to place sensible limits on the amount that businesses can get.
It is perfectly appropriate that trade exposed businesses get some help making the transition to a low-carbon economy. However, we need to set limits as to how much money the taxpayer is liable for under the scheme.
This one aspect of the proposed changes poses the biggest risk to the environment and to taxpayers. It essentially says that companies will get free credits based on how much they produce (intensity); the environment and the taxpayer will pick up all the extra cost, (without limit). This will pay big polluters to increase their production - and their emissions.
Here's what other's have had to say that supports our argument:
The NZ Herald's Brian Fallow called this ETS a "Carbon bill time bomb for taxpayers. The changes agreed are all about transferring cost from the emitter to the taxpayer, and to that extent it defeats the purpose of the exercise."
The Dominion Post's Colin James stated "Dr Smith's ETS is the ETS you have when you are not having an ETS - no cap on emissions (so no "cap" in the "cap-and- trade"), a cap on price (so no "trade", just tickle the taxpayer) and languorous phase downs of gross emissions which push out hard decisions (if needed) into a misty future."
Treasury's Regulatory Impact Analysis Team (RIAT) has formed the view that the level and quality of analysis presented is not commensurate with the significance of the proposals, which represent major design changes to the Emissions Trading Scheme, and that the Regulatory Impact Statement does not provide an adequate basis for informed decision-making.
In essence, National's decision to change the ETS is expensive and not supported by the facts.
- Oppose a price cap on carbon, even for a short period
- Oppose the 2 for 1 carbon credit deal for big industries
Section 61 inserts new sections 222A to 222G into the law. These sections spell out the "2 for 1" deal and price cap that industries and petrol companies get until the end of 2012.
What this means in practice is that a polluter only needs to surrender 1 carbon credit for every 2 tonnes of emissions, even though 1 credit equals one tonne of emissions.
Since there is also a provision for a polluter to buy their way out of their obligation for $25 a carbon credit, the "2 for 1" deal means that in truth they are only paying $12.50 per tonne of actual emissions.
The 'logic' of the Government in doing this is that it aligns us with Australia's scheme. Unfortunately, Australia doesn't have a scheme, because the Australian government doesn't have the numbers at this stage to get it through their senate. The Select Committee needs to be reminded of this fact.
Treasury said it best in their criticism of the Bill; "there is no discussion of the risks of harmonising with an overseas scheme that has not yet been finalised or agreed and may yet be subject to significant revision. Such risks may include the potential impacts on business certainty and investment decisions, and the overall credibility, sustainability and effectiveness of the NZ ETS."
In summary, the logic of aligning with a scheme that does not exist is not credible.
- Oppose the never ending, slow phase out of free allocations;
- Oppose further delays for agriculture's entry
Sections 81, 82, 83, 85, 85A, 86, 86A spell out how allocations will be phased out over time, while Part 1, clause 57 delays for a further two years the date that agriculture comes into the scheme.
The 'logic' of the Government in this slow phase out of free allocations and the delay for agriculture is again tied to alignment with a non-existent Australian scheme. (See Treasury's complaint with this poor logic in the previous section.)
With the 1.3% phase out of allocations defined in the Bill, a company that gets 100 free credits in 2014 can expect to still get 81 credits in 2030, 62 credits in 2050 and 27 free credits in 2114!
Should New Zealand businesses still be heavily subsidised by the taxpayer over 100 years from now? Should they still get significant subsidies 200 years from now?
Any significant changes to the provision of free allocation will require a 5 year notice period. This locks in profits for business at the expense (and risk) of the taxpayer. So if a firm gets a free allocation because its overseas competitors don't face a price on carbon, then just after the five yearly review they all join an international emissions trading scheme and the firm is no longer at a disadvantage compared with its competitors, they still get another five years of free credits from the taxpayer.
The delay for agriculture comes at huge expense to the taxpayer, since this sector produces 48% of New Zealand's emissions and the taxpayer will have to cover all of it for a further two years.
The irony of this is that the Government's own research shows that agriculture has the most significant options for reducing emissions, often at no cost to the farmer, but giving higher profits! (ICF Analysis of the Potential and Costs for Greenhouse Gas Emission Reductions, 2007)
The Parliamentary Commissioner for the Environment says this about agriculture and the ETS:
An ETS should be all gases, all sectors, polluter pays. Agriculture should be included. We should address these challenges by allocation and targeted support, not by exclusion from the scheme.
For example, 90% allocation of agricultural emissions will cost the taxpayer about $800 million/yr.
In summary, further delays for agriculture are unacceptable, and the never ending phase out of free credits must be amended.
- Want the carbon measurement of indigenous forestry fixed, based on existing science.
This issue is not covered in the Bill, but is an aspect of the existing Emissions Trading Scheme that needs to be fixed.
The Parliamentary Commissioner for the Environment (PCE) sums up the problem best:
The ETS strengthens existing incentives for exotics species at the expense of indigenous species. A particular problem is the current carbon look-up tables in the Forestry Regulations, which define how many credits a particular forest can earn.
The carbon look-up tables are detailed for pine. The carbon storage rates vary by region and forest age. But there is only one carbon look-up table for indigenous forests, and it assumes a very low flat rate of 3 tonnes CO2/hectare/year. Landcare have shown the rate of carbon storage in regenerating manuka/kanuka to be 2 to 3 times greater than this.
I recommend the committee endorses amending the indigenous carbon look-up tables in the forestry regulations as soon as possible, to make them consistent with the best available scientific information.
I recommend the committee establish when the amended carbon look-up tables will be available.
The Greens recommend that you adopt the PCE's recommendations in your submission. We couldn't have said it better.
- Support all of the Parliamentary Commissioner for the Environment's recommendations, particularly the full and transparent publication by the Auditor General of the number and value of all allocations (free or otherwise) distributed under the scheme.
The Parliamentary Commissioner for the Environment, like the Greens, wants the ETS to be as transparent as possible, particularly regarding all the wealth being transferred from the taxpayer to businesses. She recommends:
I am just proposing one function that could, and should, be performed by an existing independent agent -- the Auditor-General.
Free allocations transfer the cost of greenhouse gas emissions from the polluter to the taxpayer.
For example, 90% allocation of agricultural emissions will cost the taxpayer about $800 million/yr.
There will be continuing resistance to the phase out of free allocations.
The NZ public should know the size of this subsidy paid by taxpayers to polluters.
I recommend that the Auditor-General report annually on the number of carbon credits (NZUs) that are allocated to different sectors of the economy at the expense of the taxpayer.
The Greens recommend that you adopt the PCE's recommendations in your submission. We couldn't have said it better.
No submission guide would be complete without acknowledging some of the better aspects of the Bill, particularly as other submitters may want them changed for the worse.
- Support the inclusion of an appropriate Treaty clause in the legislation.
This is an important feature of any kind of legislation of this magnitude. The Maori Party have apparently secured this as part of their deal to support this Bill as far as the Select Committee. It is important that it survives in the Bill, regardless of how the Maori Party votes on the Bill when all is said and done.
This Bill has impacts on all the Treaty partners, and should acknowledge as much in writing.
- Support fixing the wilding pines problem.
There has been a significant problem with the current ETS, in that DoC and others have had to pay the carbon charge of eliminating wilding pines from sensitive areas.
We must acknowledge that the price has to be paid, but shuffling taxpayer money between Crown Ministries in order to comply with this is a waste of time and money.
The Bill proposes to exempt wilding pines from the scheme, and taxpayers will pay directly for this via the Crown. This is a sensible way of managing compliance while acknowledging the problem and the liability.
- Support the new categories for agriculture to allow farm level participation for different agricultural sectors to start at different times.
The ideal place for placing responsibility for agricultural emissions is at the farm level, where the farmer can get rewarded for doing the right thing and lowering emissions. However, this is easier said than done.
The current ETS starts with responsibility at the processor level, such as Fonterra, and allows for it to be switched to the farm level at some later date. This is OK, but is very crude as different parts of the agricultural sector will be ready or able to make the change at different times from others. (Kiwifruit farmers will be ready long before dairy farmers.)
This Bill very sensibly breaks the agriculture sector into subsectors, so that each can move to farm level compliance when they are ready and able. If you are a farmer, you may wish to submit on the specifics to help improve them, but in principle, this change is a good one.
- Support having targets in legislation, but 50% by 2050 is not nearly enough to stop warming.
It is a good thing to put the long term target into the legislation. The only problem is the target is not nearly enough to do our share in tackling global warming. The IPCC recommends that we reduce our emissions between 25% - 40% by 2020. A 50% target by 2050 is embarrassingly poor.
Tell the committee that a target in legislation is a good thing, but it needs to be much more in line with what the science is calling for. What commitment do you think New Zealand should make?
- Any other issues you have identified that are important to you.
There are so many more issues that we could cover here, and no doubt others that are important to you that we have missed out. In the interest of a brief guide, we are stopping here. We may add some other issue to our website as we continue our research.
However, the most important thing is that you make a submission, no matter how brief. The Committee Members are not experts and they are not expecting you to be one either. Speak from your heart and your mind, and be succinct where you can. If you have references, list them.
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