Climate Change Response (Emissions Trading Reform) Amendment Bill

Summary

Business Central supports the Bill and its intent to reduce New Zealand’s long-term emissions in line with our international peers. We also support the mechanism to achieve emissions reductions targets by placing a price on carbon so that emissions decline most cost-effectively. A well-designed emissions trading scheme ('ETS') will accomplish these objectives; however, we note there are some amendments this Bill should incorporate to improve New Zealand's ETS. Also, New Zealand must remain aware of international policy developments to ensure our businesses are not at a competitive disadvantage.

Background

Business Central welcomes the government’s ongoing education and policy development process to reduce the country’s emissions. We support New Zealand's contribution to international fora working to achieve consensus on tackling global emissions and putting in place agreed targets for reduction.

New Zealand, compared to other countries, has a unique emissions profile as a developed economy with a large proportion of emissions coming from our agricultural sector. New Zealand farmers are some of the most efficient and productive in the world and continue to undertake scientific research to reduce emissions further. Our electricity sector is already heavily made up of renewable sources of generation with further wind farms underway. It is through continued innovation and technology change that we can reduce emissions and improve the productivity of our critical sectors like electricity, transport and agriculture.

Submission points on the Bill

Business Central supports the cap-and-trade mechanism developed across both this Bill and the recent Zero Carbon Bill. Working in tandem, this legislation creates a market-based approach to reducing emissions. A well-designed emissions trading scheme will achieve emissions reductions most cost-effectively.

It is essential for the government not to dictate precisely how organisations reduce emissions, but to provide the incentive and framework for organisations to make their own rational choices on emissions reductions. It is only through the many millions of different investment decisions made by businesses that our overall emissions will come down.

Rewarding companies or organisations for reducing their emissions faster than required is a vital spur to technological innovation and underpins the risk-reward of conducting the needed R&D.

An essential requirement to assist businesses with the transition to a lower-carbon economy is providing them with the confidence and policy certainty they can use to plan. Emissions reductions will only occur if companies, along with government, invest heavily in the research required to come up with new ways of doing business. But research is nothing without implementation...

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