RENEWABLE PREFERENCE) BILL

Transcription

1 ROAD TRANSPORT FORUM NEW ZEALAND INC SUBMISSION ON THE CLIMATE CHANGE (EMISSIONS TRADING AND RENEWABLE PREFERENCE) BILL Cntact: Hn Tny Friedlander Chief Executive Officer Rad Transprt Frum NZ Wellingtn Ph: (04) Fax: (04) February 2008

2 Submissin f Rad Transprt Frum New Zealand n the Climate Change (Emissins Trading and Renewables Preference) Bill INTRODUCTION The Rad Transprt Frum is pleased t have this pprtunity t make a submissin n the Climate Change Bill. 1.0 ROAD TRANSPORT FORUM NEW ZEALAND 1.1 Rad Transprt Frum New Zealand (RTFNZ) is a natinwide rganisatin f vluntary members drawn frm the rad transprt industry and includes wner-drivers, fleet peratrs and prviders f services t freight transprt peratrs. The Frum prvides services t and public plicy advcacy fr its members. 1.2 The Frum s Cnstituent Assciatins include: NZ Rad Transprt Assciatin Nrthern Regin (Inc) Natinal Rad Carriers (Inc) NZ Rad Transprt Assciatin Regin 2 (Inc) Central Area Rad Transprt Assciatin (Inc) NZ Rad Transprt Assciatin Regin 4 (Inc) Cmbined Owner Drivers Assciatin (S.I.) Inc (Trading as NZ Trucking Assciatin) NZ Rad Transprt Assciatin Regin 5 (Inc) 1.3 The Frum s Assciatins have apprximately 4,000 members and assciate members wh perate in excess f 15,000 trucks ver 3,500 kg r 80% f the hire and reward truck fleet in New Zealand. The rad transprt industry turns ver apprximately $5 billin a year meeting greater than 80% f New Zealand s land-based freight needs and emplys 23,000 peple r abut 1.5% f the wrkfrce. 1.4 The Frum is the authritative vice f New Zealand s rad transprt industry. 1.5 We are grateful fr the pprtunity t cmment n aspects f the Bill. Page 2 f 7

3 2.0 We d nt wish t cmment n specific clauses in the Bill but d want t raise a number f pints f principle which are causing ur industry cncern. 3.0 NEW ZEALAND S COMPETITIVENESS 3.1 It is apparent that Gvernment plicy as set ut in this Bill is mving ahead f New Zealand s trading partners and cmpetitrs. In fact the prpsed Emissins Trading (ET) scheme has been described as the mst ambitius in the wrld. 3.2 The implementatin f that plicy invlves cnsiderable risks fr the New Zealand ecnmy. The plicy in its present frm appears t be indifferent t the ptential damage the csts likely t be impsed n majr industry sectrs will d. 3.3 A desirable climate change plicy shuld recgnize the imprtance f traditinal sectrs f cmparative advantage t maintaining ecnmic grwth. Plicy shuld recgnize that: Abatement ptins in traditinal sectrs are limited Reduced dmestic prductin in these sectrs undermines bth ecnmic grwth and the ability t fund the achievement f envirnmental bjectives 3.4 Plicy shuld include prvisins t prtect against cmpetitin frm freign firms that d nt face a price f carbn. 3.5 Plicy shuld allw fr increases in prductin in imprtant sectrs f the New Zealand ecnmy, thrugh the use f emissin-intensity targets rather than binding emissins caps. 3.6 Such measures shuld encurage emissin efficiency, but recgnize the fact that grss emissin reductins are likely t impse unviable ecnmic csts and lead t the relcatin f carbn-intensive prductin verseas. 3.7 We are cncerned that the Bill des nt appear t have regard fr these principles. Page 3 f 7

4 4.0 POLICY CERTAINTY 4.1 A desirable climate change plicy shuld identify achievable gals and map ut the necessary steps that will be taken twards achieving thse gals well in advance. 4.2 Certain and predictable climate change plicies will still impse csts upn sme sectrs and industries. These csts can be minimized, hwever, if firms and individuals are at least able t frm realistic expectatins f the future business envirnment and adapt their business strategies and investment plans accrdingly. 4.3 Sund climate change plicy shuld als ensure that the csts f the ecnmy f achieving emissin reductins are plitically acceptable. This wuld invlve: Taking accunt f the likely high csts f mving New Zealand away frm its current high-emissins trajectry and prviding adequate time and supprt fr adjustment. Ensuring that if the csts f reducing emissins becme very high, the scheme allws emissins t increase beynd target levels rather than impsing unviable ecnmic csts upn the ecnmy. 4.4 It is unlikely that the Emissins Trading (ET) Scheme prpsed will have any significant direct effect n the rad transprt industry but it will indirectly impact n ur industry if the plicy results in reduced ecnmic activity. Any csts ET impses n ur sectr will result in increased freight rates which will in turn suppress prductin and increase living csts. In view f we questin whether the plicy is sustainable in the lnger term. 4.5 New Zealand s previus experience shws that climate change plicy that threatens t impse large ecnmic csts will nt be plitically sustainable. This is illustrated in the fllwing table. Page 4 f 7

5 New Zealand Climate Change Plicies: Date Annunced Plicy Outcme 1994 Natinal Gvernment annunces its intentin t intrduce a brad-based carbn charge in Labur Gvernment annunces brad-based carbn tax f $15-25 per tn t be impsed frm 2007, excluding the agricultural sectr Labur Gvernment annunces a methane research levy t be impsed upn agricultural emissins Labur Gvernment annunces an Emissins Trading Scheme fr New Zealand, with strng links t internatinal carbn markets. Fllwing strng ppsitin frm industry grups, the plicy is repealed and replaced with a scheme f vluntary emissin reductin agreements. Gvernment abandns the plicy in 2005 fllwing strng public and business ppsitin. Gvernment abandns the plicy fllwing strng ppsitin frm the farming cmmunity.? Surce: Castalia 4.6 A high r unpredictable permit price (the price f carbn ) under the prpsed New Zealand Emissins Trading Scheme is unlikely t be plitically acceptable and any plicy that threatens t lead t this utcme will nt prvide investment security. Investrs will bserve past experience and cnclude that the plicy is likely t be repealed r watered dwn nce csts becme apparent. This lack f credibility will impede investment because the shape f plicy that will be intrduced fllwing the repeal f existing plicy cannt be knwn in advance. 4.7 A desirable climate change plicy shuld identify achievable gals and map ut the necessary steps that will be taken twards achieving thse gals well in advance. 4.8 Certain and predictable climate change plicies will still impse csts upn sme sectrs and industries. These csts can be minimized, hwever, if firms and individuals are at least able t frm realistic expectatins f the future business envirnment and adapt their business strategies and investment plans accrdingly. Page 5 f 7

6 4.9 Sund climate change plicy shuld ensure that the csts t the ecnmy f achieving emissin reductins are plitically acceptable. This wuld invlve: Taking accunt f the likely high csts f mving New Zealand away frm its current high-emissins trajectry and prviding adequate time and supprt fr adjustment. Ensuring that if the csts f reducing emissins becme very high, the scheme allws emissins t increase beynd target levels rather than impsing unviable ecnmic csts upn the ecnmy Regrettably we believe the Emissins Trading Plicy encapsulated in the Bill is seen by the wider business sectrs as being unsustainable in the medium t lnger term. This is creating significant uncertainty in the market-place and is damaging the cuntry s ecnmic perfrmance. 5.0 ARBITRARILY DISADVANTAGING ROAD FREIGHT 5.1 We nte that the first sectr t incur the Kyt liability will be liquid transprt fuels. Whereas the gvernment liability under Kyt is nly fr the difference between ur current and ur 1990 levels, the prpsed emissins trading scheme makes the il cmpanies liable fr the ttal emissins frm every unit f liquid transprt fuel. The burden fr this sectr is therefre far greater than that impsed by Kyt. 5.2 A desirable climate change plicy shuld treat equivalent emissins in the same way, regardless f the surce f emissins. If a price f carbn is used, it shuld be intrduced in a way that avids unjustifiably altering the relative prices f substitute prducts and services. 5.3 Cmplementary measures shuld nt impse additinal unfair and distrtinary regulatry burdens n specific industries. Page 6 f 7

7 5.4 In all cases, the cheapest emissin reductins shuld be pursued first regardless f whether these represented dmestic abatement pprtunities r internatinal ffsets. 5.5 Regrettably this Bill des nt treat all sectrs f the ecnmy in an evenhanded way and is placing extra csts n the rad transprt industry in a way which will be distrtinary and unfairly disadvantage specific sectrs f the New Zealand ecnmy. 6.0 CONCLUSIONS (a) (b) (c) (d) The Bill reduces New Zealand s internatinal cmpetiveness. The prvisins f the Bill are unlikely t be plitically sustainable in the medium t lng-term. The intentin t arbitrarily disadvantage rad freight is unjustified and unfairly penalizes industries and cmmunities which depend n the rad transprt industry. A cmprehensive rethink f the Bill shuld be carried ut befre it prceeds any further. Page 7 f 7