National’s reliance on the Emissions Trading Scheme to reduce greenhouse gas emissions would mean either very high carbon prices with flow-on effects for the cost of living, or New Zealand missing its international climate change commitments and paying billions, Labour says.
Labour’s newly released “climate manifesto” brings together existing and new policies on climate change. Part of the document is also an attack on National and what Labour says might happen if National leads the next government.
National has pledged to achieve the same emissions reductions as Labour and the targets currently in legislation and international agreements.
It said this will be done mainly through the Emissions Trading Scheme (ETS) as the main price and policy lever. National has also pledged to scrap emissions-reduction subsidies through the Government Investment in Decarbonising Industry Fund (GIDI) and use ETS revenue to help cover the cost of tax cuts.
Labour’s manifesto argues that the Climate Change Commission’s modelling suggests only 20-23% of net emissions reductions could be driven by the ETS.
Removing complementary measures such as industrial subsidies would “likely require” an ETS price higher than $180 – “meaning everyone would pay at least 40c per litre on petrol”.
Officials estimated replacing the Clean Car Discount with the ETS would require an ETS price of about $575, which would see an extra $1.30 per litre on petrol price, the manifesto says.
Labour also argued that reliance on emissions pricing would mean an extra 400,000ha of new exotic carbon forest by 2050 – equivalent to all land used for sheep farming. This planting would mean emissions would not be reduced.
National has also expressed doubt about land being converted to forestry and has said it would look to limit this.
Labour argues that if National does not push up carbon prices to this amount, it would have to allow widespread forestry planting and/or fail to meet emission-reduction pledges made under the Paris Agreement, with the need to spend billions of dollars purchasing offshore carbon credits.
Other pledges in Labour’s climate manifesto include:
• A second emissions reduction plan that puts NZ on the path to achieving the second emissions budget.
• Establishing a minister for just transitions to oversee the transition to a low-emissions economy.
• A 12-point plan to increase renewable electricity generation.
• Supporting the growth of NZ Green Investment Finance by investing a further $300 million, bringing the total commitment to $1 billion.
• Making climate change a research and development priority, with an initial investment of $50m and a further $20m specifically to tackle challenging parts of the economy.
• Removing diesel generators from all schools, in addition to the current policy to remove all coal boilers.
• Reforming the ETS to drive gross emissions reduction, as recommended by the commission, and giving the commission more power over ETS settings.
