Smith announces ETS review; 2 farmers on review panel of 6; Fed Farmers welcomes review and wants Ag emissions excluded

See full statement below from Climate Change Minister Nick Smith:

Climate Change Minister Minister Nick Smith today announced the panel and terms of reference for the review into the emissions trading scheme to ensure it is meeting its purpose of reducing emissions at least possible cost and that New Zealand is appropriately pacing itself on climate change relative to its key trading partners.

“All the international evidence confirms that pricing emissions is the most efficient way of addressing climate change. This review is not about whether we have an ETS or not, but about the important operational detail and the pace of its implementation to strike the right balance between New Zealand’s economic and environmental goals,” Dr Smith said.

“The review is to be chaired by David Caygill who brings a huge amount of public policy experience as a former finance minister, trade and industry minister and Chair of the Electricity Commission.”

Other members of the panel include: 

* Julia Hoare, a chartered accountant at PricewaterhouseCoopers specialising in carbon markets, and an adviser to the special select committee on the ETS

* Chris Karamea Insley, a company director with specialist knowledge of forestry, a Scion board member, with tikanga Maori knowledge, fishing interests and a sound understanding of the Treaty of Waitangi

* Tom Lambie, a dairy farmer and former President of Federated Farmers and currently Chancellor of Lincoln University § David Russell, former Chief Executive of the Consumers Institute § Geoff Thompson, a lawyer and consultant at Duncan Cotterill, with specialist knowledge of forestry aspects of the ETS 

* Dr John Wood, Pro-Chancellor of the University of Canterbury, former Ambassador to United States, Japan, Germany and Iran, and now a small scale sheep and beef farmer.

“The ETS review team will be providing the opportunity for public submissions,” Dr Smith said. “I have also consulted with Australian Climate Change Minister Greg Combet on interactions between Australia’s Multi Party Committee on Climate Change and the ETS Review Group. We remain of the view that a close relationship between New Zealand and Australia on climate change policy continues to make sense for both countries.

“New Zealand’s climate change policy is in good shape with our ETS up and running, new investment occurring in forestry and renewable energy, and complementary programmes delivering record numbers of insulated houses and solar water heating systems. However, we need to keep a close eye on international developments and how the ETS is working in New Zealand to ensure we keep doing our fair share on climate change at least cost to consumers and businesses.”

See the full terms of reference here.

Here is the full statement from Federated Farmers welcoming the review:

Federated Farmers welcomes today’s announcement of the panel members that will be chairing the Government’s Emissions Trading Scheme (ETS) review and will be pushing to keep agricultural emissions out. “It’s important the review panel asks the right questions about how we are managing our emissions and how it compares to what our trading partners are up to,” says Don Nicolson Federated Farmers President.

“This is a good time to stop and do a stocktake of where we’re at with our ETS. In a world stuck in economic crisis these types of schemes have definitely gone on the backburner.

“Its time for our politicians to accept that we are alone in instigating a comprehensive, all sectors, all gasses ETS and we hope this review will reflect on this fact.

“Our Government has just announced an astonishing $15.6 billion cash deficit. How can we justify spending $1.06 billion on an ETS tax that not only raises the cost of living for every New Zealander, but funnels our capital offshore and will make no appreciable difference to our total emissions?

“New Zealand’s global emissions are apparently 0.2 percent on a world scale. As for followers, it's just us and the European Union. Even then, the EU scheme doesn’t count whole sectors, like agriculture.

“We need to find a balance between environmental responsibility and not imposing crippling costs on farmers.

“Much has been made of the UN Cancun climate change talks a week ago but there remains no successor treaty when Kyoto expires in 2013. “From the looks of it there’s little global appetite for agriculture being included in any successor treaty.

Nick Smith’s has pledged to keep biological emissions out of the ETS if our trading partners don’t follow suit. Federated Farmers wants the review to put that pledge in writing.

“More worrying is that we still haven’t even determined how we’ll measure the ETS as being a success or failure. We’re taking a multi-billion dollar gamble on a policy the rest of the world isn’t following. “Federated Farmers believes, as it has since 1985, that spending money on research leads to efficient production systems and therefore efficient use of resources. The Global Research Alliance on Agricultural Greenhouse Gases as well as our other research units fit the bill.

“The emerging international consensus to fund research into clean energy, helping developing economies grow economically, surely a fine ambition in a world with growing needs,” Mr Nicolson concluded.

Here is The Greens' view on the announcement:

The Government’s plans to have a one-sided review of the Emissions Trading Scheme (ETS) can only lead to further weakening of an already weak scheme, Green Party Co-Leader Dr Russel Norman said today.

Dr Norman was responding to the Government’s announcement of a panel to review the ETS two days before Christmas.

“The Government has set up a one-sided panel to review the ETS. Talk of ‘balance’ is nonsense.

There is not one single representative of the environment on their panel, but the polluting industries are well represented,” said Dr Norman.

“It’s inevitable an already weak ETS will be weakened further as a result of this review. Not a happy Christmas present for our kids who will inherit the climate chaos left by the Key Government.

“The review will also create further uncertainty for businesses planning to do the right thing and respond to climate change. In economic terms, they’re weakening the price signal. This is not the way to run a smart green economy.

“The review is yet another sign this Government is unable to manage the economy for our longer term interests. Business works best with certainty. The uncertainty created by this review will see decisions involving major levels of capital investment simply postponed.”

The review comes just a year after National significantly weakened the ETS, effectively increasing the subsidies paid to carbon polluters — costs borne by the tax payer.

“There are many ways for New Zealand to respond to the looming threat of climate change. We can invest in clean technologies and make the shift to a clean economy with lower emissions,” said Dr Norman. “And we can reduce our greenhouse gas emissions, something successive Labour and National Governments have consistently failed to do. “The best way to safeguard our future prosperity is to take action on climate change now,” Dr Norman said.

(Updated with Greens comment, Federated Farmers comment and full terms of reference attached)