Dear Prime Minister,

The 4,402 people whose details are attached, signed a petition calling for your government to follow the lead of Australia and suspend the Emissions Trading Scheme (ETS) until 2013. On behalf of these petitioners, I would therefore like to formally request that you announce that the ETS will be suspended until 2013 at the earliest opportunity.

As you are aware, this is the worst possible time for a government to be increasing the financial pressure on families and small businesses through the imposition of an emissions tax. Given the severity of the recession and the widespread impact of a rise in GST, the 5 percent increase in the cost of power and four cents a litre increase in petrol and diesel will cause undue hardship. The cost increases across the economy will be significant, with power bills expected to rise by a total of $270 million over the next year and fuel by $260 million – a total of $526 million in the first year alone. These costs will seriously undermine the competitiveness  of New Zealand businesses, with the impact on agriculture alone in the year from 1 July expected to be in the region of $200 million.

The reality is that while New Zealand’s comprehensive “all gases, all sectors” ETS will generate a significant income flow for the government, it will seriously damage our economy. In comparison, the European Union's ETS targets just 43 percent of industrial emissions, excluding the transport sector which generates 21 percent of EU emissions, the household and small business sector which generates 17 percent, agriculture which generates 10 percent, and construction and waste which generate 9 percent. Furthermore, the EU scheme is based solely on carbon dioxide - methane, nitrous oxide and fluorocarbons, which make up 48 percent of the European Union's greenhouse gas profile, are all excluded.

Apart from European Union countries, none of our other trading partners have an emissions trading scheme – Australia’s scheme is now suspended until 2013, Japan’s scheme has been delayed until 2012, the US scheme is stalled, and Canada’s scheme is still on the drawing board. Meanwhile China and India have no intention of imposing any scheme that would slow their economic progress.

What all of this means, Prime Minister, is that under your stewardship, New Zealand is now totally out of step with our trading partners. Your ETS will not only impose a massive anti-competitive cost burden on Kiwi exporters struggling to succeed in markets where there are no such impediments to growth, but it will also undermine New Zealand businesses competing against imports from non-ETS countries. Your ETS will increasingly be recognised as a millstone holding back New Zealand and denying voters that brighter and more prosperous future that you promised them during the 2008 general election campaign.  

In light of these very serious matters, I do urge you to consider our request to suspend the ETS until 2013 favourably – and please be assured that I will personally advise the 4,402 people who are supporting this request of your response.

Thank you for your consideration.

Yours sincerely,
Muriel
Dr Muriel Newman
New Zealand Centre for Political Research
www.nzcpr.com
 
*The Prime Minister has not replied. We received an acknowledgement from the Climate Change Minister only.