Climate change is the biggest environmental challenge we face. Over my term as Commissioner I have made a number of submissions and comments in relation to the Emissions Trading Scheme, including acting as an adviser to the ETS Review Select Committee.
The ETS is the main mechanism by which the Government intends to manage emissions and encourage the transition of New Zealand to a low carbon economy. Forestry was the first sector to enter the scheme. Then transport fuels, electricity production and industrial processes came under the regime in July 2010. Agriculture is due to enter in 2015.
The ETS is the right framework for pricing carbon but I have serious concerns about a number of aspects of the legislation. In particular, the subsidies to big emitters will not only impose significant costs on the taxpayer but also distort the carbon market and limit the incentives to reduce emissions.