Time for industry to step up to the plate on climate change

The Council of Trade Unions is calling on industry to be more constructive on climate change issues.

"Unions have supported business concerns about the time frame for the phase out of free allocation of carbon credits. Now the proposed government changes mean the 90% free allocation will remain in place until 2018 rather than 2013 and the phase out would be completed in 2030 rather than 2025. In addition there will be five-yearly reviews," CTU economist Peter Conway said.

"However it is disappointing that some sections of the business community, in spite of that compromise, are now trying to scuttle the Bill before Parliament, creating the impression that these firms do not want to be part of the solution to global warming," Conway said.

Peter Conway said that some of the economic modelling is being used inappropriately. For instance, NZIER acknowledge that their model still results in the economy growing between now and 2025 by 42%. Once free allocation is incorporated into their model, the impact on GDP, jobs and wages is reduced.

In addition, it is more likely that firms will take action to reduce emissions if there are costs imposed. If this is incorporated into the model, then the different impacts of government paying for credits and industry paying narrows. If other countries take action on emissions the effect is also reduced.

"The key issue that needs to be incorporated into the models is an estimated impact on exports from New Zealand if consumers in Europe and other countries are persuaded that we are not taking serious steps to reduce per capita emissions. This would be a difficult scenario to model but it is one of the main economic issues. New Zealand can do little on its own about climate change, but our exports will be detrimentally affected if we do less than we should."

"The CTU has consistently argued that there needs to be a broad range of climate change responses including regulation, mitigation, investment and education."

"Our focus has been on the risks of leakage and the impact this has on workers and therefore the design of allocation of credits and assistance for workers who are disadvantaged; union involvement in education and other programmes with the business sector to directly reduce emissions and conserve energy; developing the skills base for sustainable development; and advocating for those on low incomes impacted by increased fuel, electricity and other charges as a result of emissions trading," Peter Conway said.

Ends.  Click here for other CTU documents on climate change.