News Releases

2020 emission reduction target equals large cost for New Zealanders

30 July 2009

The Greenhouse Policy Coalition submission to the government on a 2020 target for emission reductions, warns that if the government settles on a 15% reduction target from 1990 levels, it will cost NZ households ten times what the US is proposing to charge its citizens.

Catherine Beard, executive director of the Greenhouse Policy Coalition says economic analysis undertaken by the government shows that a 15% reduction in emissions on 1990 levels in 11 years time will cost each New Zealander $1400 a year, or $5,600 in reduced income per household of 4.

In contrast, the US Environmental Protection Agency has told a Senate Committee that the carbon cutting Bill passed in the House would cost - at most - $1 per day per household in 2020.

“So the largest emitter of greenhouse gas emissions would require its citizens to pay $365 per household per year (NZ$562), and New Zealanders would be paying $5,600 for a four person household per year, roughly 10 times more.”

Catherine Beard says the reason it is so difficult and expensive for New Zealand to reduce emissions is due to our unique national circumstances, including the second highest population growth amongst Annex 1 countries and our high percentage of agricultural emissions, for which there are no quick or easy solutions.

“New Zealand’s population growth since 1990 is about 20% and this correlates closely to our emissions growth since 1990, which is about 20%. Short of shooting livestock and exporting people, our business as usual emissions growth to 2020 could be another 20%. This means that even emission reductions to 1990 levels will be costly at around $4000 a year for a family of four.”

Catherine Beard said it is well recognized internationally that New Zealand has an unusual emissions profile and population growth (compared to other Annex 1 parties) which is why most of the economic modeling on what a fair burden sharing agreement would be, gives Oceania (New Zealand and Australia) a growth target.

“Groups like the NZ Business Council for Sustainable Development that are calling for an unconditional 20% gross emission reduction target on 1990 levels, clearly don’t understand the issues. A gross emission reduction target means we cannot count our carbon sinks (trees) as a credit against our emissions, so a 20% gross target would be a complete economic disaster.”

The GPC recommends that when the government offers up an emission reduction target it takes full account of all the international analysis on burden sharing. If the government decides on an emission reduction target it should also have a plan for how the cost would be kept as low as possible for New Zealanders.

“We recommend a very modest target, conditional on action by all other major emitters and conditional on being allowed to get full credit for our carbon sinks. The costs could be offset by a government programme of extensive tree planting on marginal government land and greater investment in new low carbon solutions.

See full submission (7 pages).

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