ExportNZ calls for least cost emission reductions, not high cost

Catherine Beard, executive director of ExportNZ says ExportNZ fully supports New Zealand reducing emissions to net zero by 2050, but emphasises this needs to be an affordable journey to ensure our manufacturers, food producers and exporters maintain their competitiveness internationally.

“New Zealand needs to transition to a low carbon emissions future along with the rest of the world and we already have a great advantage with our high percentage of renewable electricity.

“ExportNZ supports the use of the Emissions Trading Scheme (ETS) to cap emissions, allowing trading to find the least cost emission reduction.

“Changes already made to the ETS will ensure the price of units will steadily increase and that free allocations to emission intensive trade exposed businesses will reduce. This will send a price signal to energy users to increase efficiency, lower emissions and offset the ones that are too expensive to reduce until the low emissions technology is available.

“The government should be focusing on the emission reduction goal rather than picking sectoral winners as to how to get there.

“If the ETS has policy consequences that are considered negative for New Zealand, such as too many pine trees being planted on good food producing land, then policy interventions can be made to incentivise natives and marginal land planting.

“ExportNZ also supports the use of international emission reduction units that are verifiable and authentic, as a safety valve in the event that the changes to the ETS result in prices bringing abrupt economic shocks and widespread carbon leakage,” Beard says.