NEWS RELEASE

16 May 2008

Minister Is Trying To Down Play Cost Of Emissions Trading

Catherine Beard, executive director of the Greenhouse Policy Coalition, says the introduction of the emissions trading Bill could have far reaching economic consequences and the public deserve some clarity around the predicted costs of the scheme.

"David Parker spent most of 2007 selling this scheme to the public on the basis that it would be low cost and the economic effects would be "miniscule", based on a carbon price of $15/tonne, when in fact the price of carbon was trading at double those prices on international carbon markets at the time."

"When he launched the NZ Energy Strategy in October last year he predicted new renewables would be economic at $25/tonne, but that it would be "some time" before the price would get that high despite the fact that the price of carbon was already well past $25/tonne at that date. In addition, two months previously he had a paper before Cabinet where he described a price of carbon to achieve the 90% renewables target by 2025 of $50/tonne as "moderate" (see table attached).

"The Minister's view of what is "moderate" and affordable seems to move in an upward direction with the international price of carbon, but I am not sure that most New Zealand consumers would consider the cost increases caused by $50/tonne to be moderate, affordable or acceptable.

"Common sense would tell you that putting an extra cost on energy in New Zealand which will not be faced by other countries will reduce the international competitiveness of NZ firms and increase the cost of travel and energy for New Zealand consumers. To say the impact will be miniscule or that $50/tonne is moderate is just spin."

ENDS