Nothing is quite the hot potato in politics at the moment as climate change and the Emissions Trading Scheme (ETS). The science is not completely settled, but we can look on the issue in a similar way as we do the risk of earthquakes. We take EQC levies every year and have accumulated billions of dollars as a result – and this is seen as managing the risk. The government treats risks associated with climate change in a similar way.
That risk is that CO2 levels in the atmosphere have gone up 35% since industrialisation really began, and are set to double by 2050, and then double again by 2100 with the increased industrialisation. New Zealand emits, on a per capita basis, about nine tonnes of greenhouse gases every year. This is compared to about 1.5 tonnes per person per year for say India - and science tells us that carbon will be around in the atmosphere for thousands of years.
The political problem is that 80% of the emissions are caused by developed countries, countries which make up only 20% of the population. This inequitable situation is what has driven Kyoto.  By far the greatest emissions will occur from developing countries, but they are justifiably holding already ‘developed’ countries to account by saying we must lead the way on managing emissions. These developing countries will play the biggest part in restricting emissions in the future and that is why action is needed by us now. It is also why the Global Research Alliance on agricultural emissions initiated by the NZ PM and Ministers Groser and David Carter at Copenhagen is so important. There are multi-billion dollar research budgets going in to alternative transport, electricity and industrial technologies, but nothing into agriculture. NZ is leading the way on this. There is a massive problem in how the world will feed an extra three billion people by 2050 without massive increases in greenhouse gas emissions. Apart from Labour, the Global Research Alliance enjoys broad public and political support.
But the need to restrict emissions is one thing and an ETS is another. Labour and the Greens argue our ETS is nowhere near punitive enough, is too soft, too slow, and too generous to business. ACT don’t want a bar of it and despite arguing that carbon credits are a property right and should not be confiscated from people, say foresters, they also argue that those who emit carbon should have all costs met by the taxpayer. This from the party of personal responsibility.
The question then is: why should NZ proceed with an ETS on 1 July? There are good strategic reasons for an ETS.  We are a small trading nation, that emits hugely for its size, and that brands itself internationally as clean, green and 100% pure. We have many powerful consumers who we target and they are well heeled and profitable for our exporters. The world is set on a path to constrain emissions and the sooner we set about doing our bit to curb our emissions, the better placed we are to perpetuate our brand.
Our ETS is as gentle as it can be and still have one. It takes account of our unique vulnerabilities with heavy concentration on agriculture and will cost the average household about $3 per week. There will be added costs to business that rely on energy and it will cost 2.5 cents per kilo milk solids for dairy and about 6 cents per kilo for a lamb carcass. We can’t make the savings other countries can in power generation because we already produce 70% of our electricity by renewable methods – we are stuck with penalising agriculture. But we are also best placed to make gains from the sale of high quality food to those extra 3 billion people by 2050.
An ETS can be gently turned on, and with no international response, gently turned off. Half the population want it and half hate it, most see the need to do something. I think we walk a good middle line that accounts for our exposure and our potential.

Chester Borrows
MP for Whanganui

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