Australian and NZ emissions schemes not compatible

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Australian and NZ emissions schemes not compatible

The differences between Australia’s planned emissions trading scheme and New Zealand’s make them incompatible, and they could not work together as one, says Business NZ.

Chief Executive Phil O’Reilly says it is unfortunate that the differences between the two schemes would result in a competitive advantage to Australian businesses over New Zealand businesses.

Mr O’Reilly says major things that NZ business wanted - but didn’t get - have been included in the Australian plan:

1. Credit allocation based on intensity measures, to recognise the importance of operational efficiency relative to emissions - this allows for economic growth (in the NZ plan, credits are allocated according to absolute emissions, giving no incentives for efficiency relative to emissions - this restricts economic growth)
2. No penalties for land use change (in the NZ plan, forestry gets penalised for changing land use)
3. One-way trade so companies can buy but not sell credits overseas, to stabilise carbon prices (the NZ plan would bring volatile carbon prices)
4. Protection for transport fuel users, with petrol tax reducing as carbon prices increase (the NZ plan exposes motorists to the full cost of petrol price rises)
5. A timeline for implementation that will be activated only if the productive sector is properly prepared (the NZ plan makes less allowance for sector readiness)

“It would appear that in the Green Paper the Australian government is demonstrating it has listened to business,” Mr O’Reilly said.

Mr O’Reilly said a logical move would be for the New Zealand government to delay its plan and investigate ways to adopt the key features of the Australian scheme.