Big industries emitting greenhouse gases are to be handed over $1 billion in subsidies over the next decade -- and the money will some from ordinary energy consumers such as householders.
Under the new rules proposed for the Government's Emissions Trading Scheme (ETS), major emitters will be given rebates for about 90 percent of the electricity price increases stemming from the scheme -- but ordinary consumers will pay the full price rise.
And to add to their woes, it is those consumers who will be paying the subsidies to big businesses, says Sustainability Council executive director Simon Terry.
"Households, road users and small and medium businesses that are responsible for only a third of the nation's emissions carry over 90 percent of the net charges resulting from the ETS up to 2012, and only a little lower proportion for the five years after this," Mr Terry said today.
Climate change was the ultimate leveller and every tonne of emissions counted -- there was no place to hide from its consequences. Because it was the ultimate democratic issue, sustainability policies had to be fair and deliver meaningful gains for the environment.
The Government is trying to rustle up support from the New Zealand First and the Greens parties to past the legislation setting up the ETS, as it so far has only about 50 votes so needs the support of either New Zealand First and the Greens, or the Maori Party.
But Maori Party co-leader Tariana Turia yesterday said the bill was "fundamentally flawed" because it would punish householders and would give some industries a free ride .
The subsidy was originally targeted to cover price increases for electricity that, while generated from renewable sources, is still priced up to the level of power made from fossil fuels.
But Mr Terry said the ETS draft legislation reported back from select committee now proposes the 90 percent subsidy instead of what would have been about a 75 percent subsidy.
"At current world prices for carbon credits of $30/tonne, the proposed payments will total over $1 billion up to 2018, and a similar amount again for the period from 2019 to 2030," he warned.
And the Sustainabililty Council echoed a concern expressed by Mrs Turia that the existing bill offers few environmental gains.
"The draft legislation has left in place rules that mean gross emissions will be reduced by less than 2 percent over the first five years of the scheme," said Mr Terry.
"It maintains the complete exemption for agriculture over this period when that sector accounts for half the nation's emissions and has by far the largest source of low cost options for saving emissions - many of them at a profit," he said.
Farmers and other agricultural producers will receive a net subsidy on animal emissions of $1.31 billion up to 2012, after account is taken of the charges they pay on electricity and fuels (calculated on a price of $30/tonne). Fonterra will in addition receive a subsidy for its energy emissions.
Mr Terry called for the Government to price greenhouse gas emissions so that it can meet its Kyoto Protocol obligations and protect its "clean, green" brand.
He said that farmers should be made liable earlier for emissions and that all emitters should have to pay carbon charges on the same proportion of their emissions, stepping up together as proportions rise.
Instead of giving all major emitters a blanket subsidy, assistance should be given to individual industries according to the benefits they delivered to the nation.
