The Government’s announcement that it is banning industrial gas certified emission reduction units (CERs) from being purchased in New Zealand will potentially have a serious knock-on effect to the costs felt by businesses and households, says BusinessNZ Chief Executive, Phil O’Reilly.

“BusinessNZ supports emission trading as the most effective means of delivering an efficient carbon price into the economy. However, it’s imperative that businesses are able to find the least cost form of carbon abatement wherever it is.

“Kiwi businesses will be forced to buy higher priced units, resulting in increased costs for both business and households at a time when they can least afford it. Trade-exposed businesses, already at a disadvantage because their competitors do not face a similar price on carbon, will potentially have their international competitiveness further undermined.

“It would be better – as we advocated – if the New Zealand Government instead worked with the UN on issues of environmental integrity of CERs. Only then if they are found to be flawed, consider banning them, if not, why impose extra costs on New Zealand?

“The Government’s decision appears to call the future use of all CERs into question, undermining a key fundamental element of the trading scheme.

“Just because the EU and Australia has made the decision to ban industrial gas CERs, before the UN has completed its work, does not mean it is right for New Zealand to follow. The EU has a whole different set of motivations, including the swap-out of old Soviet-era technologies for more carbon efficient ones in the Eastern European countries. New Zealand is already well ahead of the game, with over 70 percent renewable energy and businesses operating at world-best carbon intensity practice. The only thing banning industrial gas CERs here will result in is greater costs.”