In her latest submission, Parliamentary Commissioner for the Environment Dr Jan Wright is urging the Emissions Trading Scheme Review Panel to recommend strengthening the ETS.
Dr Wright says there is currently a risk that new carbon-intensive industries will be eligible for taxpayer subsidies under the scheme.
“Under the ETS as it stands carbon-intensive industries are subsidised by the taxpayer for the cost of their emissions via an allocation system.
“These subsidies are already far too generous and last far too long but there is a danger of similar levels of subsidy being provided to new carbon intensive industries.
“For example it is possible planned large-scale lignite exploitations could attract subsidies for its emissions under the current system – this is clearly at odds with the intent of the ETS.”
Dr Wright is also urging the government to ensure agriculture enters the scheme in 2015 as planned.
“Agriculture accounts for fifty percent of our emissions and must come into the ETS on schedule if we are to retain our credibility on climate change.
“New Zealand has to pay for the cost of emissions which means any delay in bringing agricultural emitters into the ETS will see that cost landing on the taxpayer.
“Bringing agriculture into the ETS will also help create incentives for the kind of low-carbon agricultural science New Zealand is in a prime position to profit from.”
Other recommendations made include expiry of the two-for-one deal and the $25 price cap on carbon credits.
A copy of the submission is available here.