Membership of the special select committee to review the ETS
Chair: Peter Dunne
Dr Paul Hutchison
Terms of reference
- hear views from trade and diplomatic experts on the international relations aspects of this issue;
- consider the prospects for an international agreement on climate change post Kyoto 1, and the form such an agreement might take;
- require a high quality, quantified regulatory impact analysis to be produced to identify the net benefits or costs to New Zealand of any policy action, including international relations and commercial benefits and costs;
- consider the impact on the New Zealand economy and New Zealand households of any climate change policies, having regard to the weak state of the economy, the need to safeguard New Zealand’s international competitiveness, the position of trade-exposed industries, and the actions of competing countries;
- examine the relative merits of a mitigation or adaptation approach to climate change for New Zealand;
- consider the case for increasing resources devoted to New Zealand-specific climate change research;
- examine the relative merits of an emissions trading scheme or a tax on carbon or energy as a New Zealand response to climate change;
- consider the need for any additional regulatory interventions to combat climate change if a price mechanism (an ETS or a tax) is introduced;
- consider the timing of introduction of any New Zealand measures, with particular reference to the outcome of the December 2009 Copenhagen meeting, the position of the United States, and the timetable for decisions and their implementation of the Australian government; and
- report to the House accordingly.
There is no reference to relitigating the science of climate change. That was in the initial TOR drafted by ACT but has been quietly dropped.
While the overall objective of the select committee is to consider the appropriate climate change policy response generally (and assuming without preconceptions), the TOR do provide an indication as to what the outcome of the process may be.
The TOR contains a number of references to international issues, including the prospect and form of an international agreement replacing the Kyoto Protocol, the position of the US and the timetable for implementation of the Australian scheme. At the same time, the TOR also talks about the current weak state of the economy, safeguarding New Zealand’s competitiveness and the position of trade-exposed industries. This suggests:
- given that international thinking still tends to favour emissions trading over carbon taxes (and President-elect Barack Obama has strongly advocated emissions trading), it is likely the ETS will remain.
- exposing New Zealand business to a carbon price is likely to be delayed to avoid exposing New Zealand business to costs that could damage their competitiveness. This could take the form of either, or both, a delayed timetable or a more generous free allocation of credits.
The choice of Peter Dunne as chairperson is interesting. He is on record as preferring an ETS to a carbon tax. He is also focussed on measures to minimise costs on households. To the extent that delay in implementation of some form of carbon price in the economy will reduce direct costs on households, Peter Dunne will likely be supportive.
The Government and its support parties have a clear majority on the committee. Prime Minister John Key said yesterday that there were a number of aspects of the ETS that National agreed with. He maintains 30 September 2009 is a realistic target date for passing new legislation, although concedes this may not be achievable if the committee ultimately does not recommend retaining the ETS.