John Boscawen MP speech to ETS Public Meeting; Beach Street Hall, Beach Street, New Plymouth; Tuesday May 4, 2010.
Good evening ladies and gentlemen. Thank you very much for taking the opportunity to come this evening.
This is the seventh and final speech in my two day tour through the Waikato and Taranaki regions. Once again we have another outstanding turnout.
Over the last two days, I have addressed meetings in Morrinsville, Matamata, Tamahere on the outskirts of Hamilton, Te Awamutu, Otorohanga, Te Kuiti and finally this evening in New Plymouth.
I have been stunned by the turnout to these meetings and the reaction I have received from shopkeepers and pedestrians on the streets in these towns. There is widespread concern amongst rural New Zealand that is matched in cities such as New Plymouth. I have also detected major concerns by rank and file National Party members, some of whom have told me that they have already resigned from the National Party over this issue and many more who have told me that they intend to do so if the ETS is implemented on July 1.
The New Zealand Emissions Trading Scheme comes into effect on July 1. Since it was passed into law in November last year much has changed. In light of these changes it is time to take a step back and to take stock of the scheme. It is time to remind ourselves why the legislation was passed in the first place and to ask whether it still makes sense to proceed with it.
The ETS will have a profound impact on our economy, raising prices across the board and costing jobs. Climate Change Issues Minister Nick Smith himself has said "this legislation is probably the most significant change and reform, of a financial nature, since the introduction of GST' - and just to be clear, he meant GST per se, not the 2.5 percentage point increase that may be implemented later this year.
The ETS is designed to increase the price of energy. Treasury forecast that the scheme will result in a five percent rise in the price of electricity and a four cents per litre rise in the cost of petrol from July 1, double again in 2013. In addition the ETS will also tax emissions from certain industrial processes and from agriculture. These increases will flow through every segment of our economy and affect every New Zealander.
Meat and Wool New Zealand has calculated that the ETS tax cost for the average dairy farmer will be just over $10,000 per annum. Now you may have heard Prime Minister John Key say that agriculture doesn't come into the ETS until 2015. That is correct, but only technically. Farmers don't have to account and pay for the methane given off by their animals when they burp or the nitrous oxide from fertiliser until that time. However, for the average dairy farmer these costs represent less than a quarter of their total ETS bill. By far the largest costs faced by a dairy farmer are the higher costs of the petrol and electricity consumed on the farm, and of the costs incurred by the dairy factory - these costs start on July 1 this year.
In fact Meat and Wool New Zealand calculate that the total cost of the ETS by 2015 will be 7 cents per kg of milk solids. Just a short while ago Federated Farmers was predicting an average profit per dairy farmer this year of 25 cents per kg of milk solids. While this has increased with the recent announcement by Fonterra of an increase in the payout, it still represents over ten percent of the average dairy farmer's profit. Nick Smith says "that the cost is not excessive for business.' Can you imagine the Government asking the teacher unions to take a ten percent pay cut?
For struggling beef farmers, who receive less today for their animals than they did twenty years ago, it is even worse.
If you are a farmer, and if you only take one thing from tonight's meeting, please understand that you will be affected by the ETS from July 1 this year. Do not be fooled by any amount of National Party spin that farmers will not have to pay until 2015.
However, it is not just farmers who will be feeling the pinch. Still struggling to recover from the recession, businesses across the board will be hit hard as they are saddled with higher production and transport costs. Domestically business will try to pass costs onto consumers as much as they can. That means prices will rise for many of the daily staples that are produced here and not imported. Not only will we be paying more for electricity and petrol, but also for bread, butter and milk.
Internationally, however, our businesses cannot pass on their costs. In a competitive world market, exporters receive the world price for their product. Foreign consumers do not care if Fonterra's production costs have increased, they will simply buy from someone else. The world price for milk is the world price; farmers get what is left over after processing costs. Some firms will be able to absorb these costs, others will not. They will either close down or shift production overseas. I have spoken to several firms for whom this is the reality they face. The Government recognises as much. In a Ministry for the Environment report published in December last year, to which Nick Smith wrote the foreword, the following statement appears:
Many New Zealand-based firms operate in markets in which prices are set internationally. This includes both firms that are exporting and those that produce goods that compete against imports. For these 'trade-exposed' firms, an increase in the costs of production in New Zealand as a result of the NZ ETS will make them less competitive relative to firms in other countries that are not facing an increase in their production costs.
The same report also warns that:
If these other countries do not place controls on emissions, this may cause emissions leakage: New Zealand emissions fall, but there is no reduction in global emissions since production has simply shifted abroad. The lost business activity may not return to New Zealand in future, even when emissions pricing is more widespread internationally.
Sadly, that means for some New Zealanders, not only will they be facing higher electricity, petrol, bread, butter and milk prices, but they will also be out of a job.
The ETS will impose real costs on the economy; it will affect real people.
Why then, implement this scheme? Well, the ETS is one of the Government's responses to the hypothesis that human activity contributes to 'climate change' or 'global warming'. It is, to quote Nick Smith about "ensuring that New Zealand does its fair share to combat climate change.'
The idea was that by imposing a cost on greenhouse gasses, we would emit less of them, either by reducing consumption generally or by investing in new technology and carbon sinks such as forests. With countries working together emissions would drop sufficiently world wide to avoid potentially harmful climate change. The costs would be justified by the benefit to the environment.
That at least was the idea.
For better or worse, the international political environment has changed greatly since then.
Australia, the country on whose draft scheme ours was modelled has just scraped any plans to introduce an ETS until at least 2013. Prime Minister Kevin Rudd buried it last week.
If John Key had any last remaining doubts that he had made a mistake by implementing this legislation it must surely have disappeared last Tuesday with this announcement.
The United States is nowhere near passing a scheme. Politicians there have more pressing things to deal with. And in any event, President Obama spent whatever political capital he had pushing through his recent healthcare reforms.
The Copenhagen Climate talks broke down without deciding on a successor agreement to the Kyoto Protocol. Most commentators no longer expect any agreement that might give rise to an ongoing financial obligation by New Zealand beyond 2012.
President Sarkozy of France had to scrap a planned petrol tax rise recently because of fierce regional opposition.
There are signs that German Chancellor Angela Merkel is wavering in her commitment to lead world climate change efforts.
And, 'climategate' and other UN IPCC irregularities have increased public scepticism of the human induced global warming theory.
It is ACT's contention, that in light of these changes it is imperative to re-evaluate the New Zealand scheme.
It is time to ask whether it makes sense to continue with the ETS.
The answer, quite simply, is "no'. Even assuming John Key and Nick Smith have got the science right, the New Zealand ETS has no chance of achieving its raison d'être. The scheme was meant to represent our contribution to global climate change mitigation efforts. There is no global effort to be part of; and, by going it alone we will not make an iota of difference to the world climate.
Whether we like it or not, we are too small to affect world climate on our own. We produce only 0.2 percent of total greenhouse gas emissions. Even if we shot every cow and sheep in the country and stopped using cars and heating our houses we would still not affect world climate.
In the words of the Prime Minister's Chief Science Advisor Professor Sir Peter Gluckman: "anything we do as a nation will in itself have little impact on the climate - our impact will be symbolic, moral and political.'
If we go ahead with the scheme, in ten, twenty or thirty years the climate will not be any better off. However, we will be poorer.
Unfortunately, it seems John Key and Nick Smith are not prepared to re-evaluate the situation, let alone to delay if not scrap the ETS. Instead of stepping back to take a cool, rational stocktake of the situation, Nick Smith is, day after day, issuing misleading, contradictory and inconsistent justifications for continuing full steam ahead. These statements do nothing to inform public debate; they only serve to confuse.
In a press release last week Nick Smith said "It is also not correct that the ETS is a tax. This completely ignores the carbon credits flowing to forest owners.' Fact: for all practical purposes the ETS is a tax on our economy. The fact foresters get a subsidy is irrelevant. Any other argument is semantic.
Nick Smith said his ETS is less severe than Labour's: "National's changes have more than halved the costs to businesses and households.' Fact: while this may be correct, comparisons with what Labour would have done are totally irrelevant. Nick Smith could scrap or delay the ETS. He is choosing not to do so. No comparison with Labour will change this. What matters is what Nick Smith and the Government choose to do, not what Labour would have done.
Nick Smith says "Claims that New Zealand is the first in the world to have an ETS is incorrect. Three quarters of countries facing Kyoto commitments, 29 out of 38, already have an ETS.' Fact: all of those 29 countries operate under the European Union ETS. This is an ETS for a whole trading block rather than for an individual country. It is not even remotely comparable to ours. It does not impose the same costs on European producers as ours does on New Zealand businesses and farmers. In addition, over 80 percent of European trade is internal and less than 20 percent is exported outside the European Union. In New Zealand's case none of our major trading partners have an ETS.
Nick Smith says the Government has "provided generous allocations for trade-exposed industries.' Fact: he is imposing a cost on businesses and consumers that would not exist otherwise. There is absolutely nothing generous about that.
Nick Smith says the ETS "provides a clear financial incentive to plant trees and not deforest'. Fact: he fails to mention that it was the Kyoto/ETS debacle that triggered the mass-deforestation in the first place. If the Government moves to delay the implementation of our ETS there is nothing to stop it leaving the disincentive for deforesting pre-1990 forests in place until the end of first Kyoto Commitment Period on December 31, 2012. We can then review that if we enter into binding commitments beyond January 1, 2013, which at the moment looks extremely unlikely.
Nick Smith says we need to implement the ETS on July 1 to give businesses the certainty and necessary "incentives to invest in forestry, renewable energy and more efficient technology'. Fact: the type of investment he is talking about requires long term certainty. There is no such certainty. He has already signalled that it is likely he will not proceed with the ETS in its current form after his review next year: "We have scheduled a review in 2011 and will not be proceeding with full obligations and additional sectors unless progress is made by New Zealand's trading partners."
Nick Smith says in the first year of the scheme "forest owners are budgeted to receive $1100 million in credits as compared to the $350 million in costs to businesses and households for emissions.' Fact: this statement is misleading on several fronts. First, it implies the yearly cost is $1.1 billion versus income of only $350 million. Fact: the $1.1 billion does not represent the carbon liability incurred by the Government in 2010. Rather, it is a composite figure that includes a proportion of the liabilities attributable to 2008, 2009 and 2010. In addition Nick Smith's own advisors told me last Thursday that approximately $420 million of this $1.1 billion related to pre-1990 forests (ie: 16.9 million tons out of a total of 44.3 million tons of carbon). In short, contrasting the $1.1 billion with the yearly revenue figure of $350 million is pointless. I am happy to discuss further nuances of the $1.1 billion figure with anyone who is interested afterwards.
Second, the sentence implies the Government will only generate $350 million from the scheme. Fact: Nick Smith's own officials have confirmed to me in that same meeting that this figure ignores the windfall profits the Government will make from state owned electricity generators.
Because of the way the New Zealand electricity market works the wholesale price is the same for all the generators and is set by the cost of the most expensive one. Currently, 80 percent of the time the most expensive generator is Genesis' coal and gas fired Huntly power station. From July 1, Genesis will have to pay for its emissions of carbon dioxide from that coal and gas. So for example, if Genesis was able to offer electricity at ten cents per unit before the ETS, it will now have to factor in the cost of carbon credits, say an extra cent per unit. This higher price of eleven cents now becomes the market, or equilibrium, price that all generators will receive.
State owned companies such as Meridian that generate electricity from renewable sources such as hydro and wind will have the benefit of the higher price, while they incur no extra costs for carbon emissions. They will be making hundreds of millions in extra profits - all of which will either flow to the Government as dividends or be retained within those companies for future investment thus increasing the value of the company to the Government.
Finally, Nick Smith was careful only to quote the revenue figure for stage one of the ETS. Once stage two kicks off in 2013 and the carbon price doubles from $12.50 per unit to $25 per unit we can expect the revenue figure to double. It will increase further still when gasses such as methane and nitrous oxide are added to the scheme down the track.
Nick Smith said "I have been contacted by a number of businesses who are making substantial investments or have entered into significant contracts that would be severely disadvantaged by change.' Fact: this is not surprising; of course those with a vested interest in the scheme are keen to see it continue. I would expect Contact Energy and Trust Power, who will be huge beneficiaries of the ETS, to be lobbying Nick Smith and the Government to proceed with the scheme. Equally, owners of post-1990 forests who stand to make massive windfall gains from this will be doing the same.
Also, Nick Smith fails to mention all those businesses that will be harmed by the ETS.
Moreover, he is confusing a potential argument for compensation with a justification for continuing with the ETS. If businesses have invested in reliance on the scheme, then it may be justified to talk about compensating them. But, that in any event is a sunk cost. It has been incurred and we cannot change it. It in no way forms a justification for imposing new costs on businesses and consumers. That will just do more harm to our economy.
Nick Smith claims it is too late to scrap the ETS now. Fact: with ACT's support National can put the House into urgency and delay the scheme. Indeed, National and the Maori party used urgency to pass the ETS in the first place.
When passing the ETS into law last year, Nick Smith said of Labour's old scheme that it "was a branding statement by a dying Government wanting to make gestures about saving the plant, with little regard to whether they would work or impact on consumers, on jobs, and on investment.' It seems things have come full circle. While the National Government certainly is not a dying government at the moment, the description of blind advocacy for the ETS is certainly apt and National needs to be very careful it does not cost them the next election.
Nick Smith was correct when he said "this legislation is probably the most significant change and reform, of a financial nature, since the introduction of GST." Unfortunately, unlike GST, the ETS will be a change for the worst. Given the changes in the international political climate over the last few months, National owes it to New Zealanders to stop issuing misleading statements about the ETS, to step back and take stock of whether it makes sense to proceed with the scheme.
Finally, if you are not prepared to sit back and see National take its core supporters for granted, I urge you to write to John Key, Nick Smith and the whole National cabinet calling for the Government to match Australia by delaying our ETS until at least 2013. The Government is under growing pressure on this issue. Every voice counts.
ACT New Zealand Climate Change Spokesman John Boscawen today poured scorn upon Agriculture Minister David Carter’s claim at Mystery Creek that the Government needs to proceed with the Emissions Trading Scheme (ETS) to avoid a potential trade backlash from Europe.
“If National proceeds as scheduled then, on July 1 2010, we will become the first and only country in the world to have such a comprehensive ETS. It is simply not credible to argue that we’ll be penalised if we don’t lead the world on having an ETS,” Mr Boscawen said.
“Further, Mr Carter referred to National’s pre-election considerations but neglected the fact that the climate change situation has changed dramatically since then – only last week Australia announced that it was delaying its plans until at least 2013. The US does not have an ETS, and nor do any of our major trading partners. National needs to wake up to the reality of this changed situation.
“The Government also continually confuses the New Zealand ETS – a single country scheme – with that administered by the European Union trading bloc. The two are completely different: our ETS will directly penalise all exporters, whereas the European ETS imposes costs on the European trading bloc and 80 percent of European exports are internal.
“Mr Carter also perpetuated the National Party myth that agriculture will not come under the ETS until 2015. Meat and Wool NZ has calculated that the cost for the average dairy farmer is $10,200 per annum. Less than a quarter of this is animal methane and nitrous oxide – which comes into the ETS in 2015 – but the overwhelming majority is electricity, petrol and the processing costs of dairy factories. This starts on July 1 this year.
“Meat and Wool NZ also confirms that the cost of the ETS to dairy farmers is 7.5 cents per kg of milk solids – the MAF estimate of 2.5 cent, which Mr Carter quotes is just a fraction of the full true cost.
“It’s time for National to start playing it straight and being honest with farmers. If this Government intends to continue with the ETS, it must tell farmers what costs they’ll be facing from July 1,” Mr Boscawen said.
ACT New Zealand Climate Change Spokesman John Boscawen was today pleased to announce the success of day one of his two-day ETS public meetings tour throughout the Waikato and Taranaki regions.
"I have been overwhelmed by the great public attendance at my public meetings yesterday in Morrinsville and Matamata, and again last night in Tamihere on the outskirts of Hamilton," Mr Boscawen said.
"People across New Zealand - be it in the rural heartland or urban centres - are increasingly worried about the Government’s refusal to delay its ETS in light of changes in the international political climate.
"However, from the response I received at my public meetings, and walking the streets and talking to residents and shopkeepers, in Morrisville and Matamata it is very clear that rural people in particular are very concerned for their future.
"It makes no sense for New Zealand to proceed with an ETS if the world’s major emitters and our major trading partners don’t do so also. If we go it alone, as we are set to do, the climate won’t be better off - but we’ll be poorer. That is ridiculous. New Zealanders are aware of this and are calling for the ETS to be delayed, if not scrapped. It is time John Key and Nick Smith heeded their calls.
"I look forward to meeting with more people at the four public meetings I am holding today," Mr Boscawen said.
Public meetings are being held today in:
* Te Awamutu - Te Awamutu Rugby Sports and Recreation Club Inc., 420 Albert Park Drive Te Awamutu, 9.30 am;
* Otorohanga - Otorohanga District Library Meeting Room, 27 Turongo Street, 11.30 am;
* Te Kuiti - St Johns Hall, 2 Jennings Street, Te Kuiti, 2.00 pm; and
* New Plymouth - Beach Street Hall, 40 Beach St, New Plymouth, 7.30 pm.
ACT New Zealand Climate Change Spokesman John Boscawen will continue his campaign to defer the Government’s implementation of the Emissions Trading Scheme, and will hold a number of public meetings in the Waikato and Taranaki regions.
“These meetings are an opportunity for members of the public to learn just how much the ETS will cost them and their families – as well as the cost to our farmers, businesses and exporters,” Mr Boscawen said.
Morrinsville: 11am, Morrinsville Community House, Canada Street.
Matamata: 2:30pm, St Andrews Presbyterian Church, Meura Street.
Hamilton: 7:30pm, Mellow Manor, Hamilton/Cambridge Highway, Tamahere.
Te Awamutu: 9:30am, Te Awamutu Rugby Sports & Recreation Club, Albert Park Dr, Te Awamutu.
Otorohanga: 11:30am, Otorohanga District Library Meeting Room, Turongo Street.
Te Kuiti: 2pm, St Johns Hall, Jennings Street, Te Kuiti.
New Plymouth: 7:30pm, Beach Street Hall, Beach St, New Plymouth.
Auckland: 7:30pm, Royal Akarana Yacht Club, Tamaki Drive, Orakei, Auckland.
Christchurch: 7:30pm, Heaton Normal Intermediate School, Heaton Street, Merivale.
Further meetings are planned for May 7 (Timaru & Ashburton), May 31 (Takapuna), and June 28 (Katikati, Te Puke, Tauranga). Details will be released soon.
ACT New Zealand Climate Change Spokesman John Boscawen today demanded Climate Change Issues Minister Dr Nick Smith stop his misleading, contradictory and inconsistent justifications for the New Zealand ETS and be honest to New Zealanders about the financial burden he insists on imposing on the country.
"It is impossible to have any confidence in Dr Smith as Minister - he's in denial about the futility of the ETS; scrambling to justify a scheme that, while making no difference to the world climate, will come at a huge cost to our economy," Mr Boscawen said.
"Minister Smith has regularly played politics and made misleading statements. For example: Nick Smith said the ETS isn't a tax because foresters receive credits. Fact: for practical purposes the ETS is a tax on our economy, subsidies to foresters notwithstanding.
"Nick Smith said he's 'been contacted by a number of businesses who are making substantial investments or have entered into significant contracts that would be severely disadvantaged by change'. Fact: he failed to mention the businesses that will be harmed.
"Nick Smith said his ETS is less severe than Labour's. Fact: he's the one choosing to inflict an ETS on New Zealand. No comparison with Labour will change this. What matters is what Nick Smith chooses to do, not what Labour would have done.
"Nick Smith said 29 countries have an ETS. Fact: the EU ETS isn't an all-sectors, all-gases scheme, and any comparison misses the point that our farmers and exporters will be at a competitive disadvantage.
"Nick Smith said the Government has 'provided generous allocations for trade-exposed industries'. Fact: he's still imposing a net cost on our businesses.
"Nick Smith said the ETS 'provides a clear financial incentive to plant trees and not deforest'. Fact: the Kyoto/ETS debacle triggered the mass-deforestation in the first place.
"Nick Smith said we must implement the ETS on July 1 to give the certainty necessary to incentivise forestry, renewable energy and efficient technology investment. Fact: there's no certainty when he's signalled he won't proceed with the ETS in this form post-2011.
"Nick Smith said the point of the ETS is to combat 'global warming'. Fact: no matter what we do it won't have an effect - we're simply too small to change the climate on our own.
"How can we have confidence in such a Minister? New Zealand's response to climate change is a serious issue with huge economic implications and the public deserves a Minister prepared to look at the facts - not one as confused and misleading as Dr Nick Smith," Mr Boscawen said.
Environment Minister Dr Nick Smith’s claim that 29 individual countries have implemented an ETS is flawed at best – Dr Smith is confusing an ETS across an entire trading bloc with one that affects an individual country, ACT New Zealand Emissions Trading Scheme (ETS) Spokesman John Boscawen said today.
“The European Union ETS increases costs across an entire bloc of countries – putting them all at an equal disadvantage. New Zealand, however, will be disadvantaged by having an ETS when none of our major trading partners have similar schemes,” Mr Boscawen said.
“Another important difference is that the European ETS excludes petrol – and when France tried to include petrol with a carbon tax earlier this year, Present Sarkozy abandoned the move after suffering huge losses at regional elections.
“It must also be remembered that the EU ETS has been structured in such a way that there have been massive exemptions and allowances so it doesn’t apply to large parts of the European economy.
“Dr Smith repeatedly – and proudly – told the New Zealand public and Parliament last year that we would be the first country in the world to have an all-sectors, all-gasses tax. Now, six months on – with Australia deferring its ETS until at least 2013, no progress in the US, and Angela Merkel having second thoughts on European world leadership – Dr Smith now seems to want to forget his stand on world leadership.
“The fact is that the New Zealand ETS will impose a significant cost burden across all Kiwi families, businesses and exporters. Our three major trading partners – Australia, China and the US – do not have an ETS.
“Proceeding on July 1 will catapult us into world leadership – putting businesses and consumers at risk at a time when we’re still coming out of recession and have high unemployment,” Mr Boscawen said.
Reports that Australia has decided to postpone the implementation of its Emissions Trading Scheme (ETS) until 2013 is just the sort of news that Prime Minister John Key was waiting for and he can now delay the start of New Zealand's ETS, ACT New Zealand Emissions Trading Scheme (ETS) Spokesman John Boscawen said today.
"This news plays right into the hands of the man who, in October 2008, said that National would balance New Zealand's environmental responsibilities with our economic opportunities," Mr Boscawen said.
"This comment was reported on Mr Key's campaign blog on October 23 2008. He also said:
‘...while we must play our part in the fight against climate change, we shouldn't be the world leader, because that will come at the expense of our economy ... I see no sense in New Zealand exporting emissions - and jobs - to another part of the world.'
"The Prime Minister clearly sees that implementing the ETS is madness: it will cause the cost of electricity to increase five percent from July 1 2010, and push the price of petrol up to four cents per litre - and double it in 2013.
"I call on Mr Key to follow Australia's sensible lead and postpone the ETS. Implementing it now the ETS will impose a significant, if not crippling, burden of cost on to all New Zealanders - especially farmers and exporters - which is exactly what he said he didn't want to do," Mr Boscawen said.
The Government’s Emissions Trading Scheme is set to increase price levels by 0.4 percent after it comes into force on July 1, which is the same amount as today’s quarterly inflation result. The impact of this single piece of legislation will be equal to that of all other inflationary forces over the last quarter combined, said ACT Climate Change Spokesman John Boscawen.
"The price impact of the ETS is largely made up of a five percent increase in the price of electricity and a four cents per litre rise in the price of petrol. These are significant increases that will hurt ordinary New Zealanders, especially those already struggling to make ends meet," Mr Boscawen said.
"Worst of all, the Government is imposing this cost on Kiwis for no apparent benefit. New Zealand is too small to influence the climate on our own. That means, even if Nick Smith and John Key have got the science right, their scheme won’t make an iota of difference to the world climate unless the world’s major emitters act also.
"The reality is that none of the world’s major emitters and none of our major trading partners is proposing anything nearly as radical as the New Zealand ETS, nor are they likely to do so. We’re going it alone. Unfortunately, while we’re too small to change the climate, the ETS is big enough to hurt our economy.
"I call on Prime Minister John Key and Dr Nick Smith to delay, if not scrap, the ETS until the world’s largest emitters and our major trading partners follow suit," Mr Boscawen said.
ACT Climate Change spokesperson John Boscawen today called on Climate Change Issues Minister Hon Dr Nick Smith to stop misleading the public over the costs of his Emissions Trading Scheme.
"Earlier today Nick Smith said that ‘New Zealand would face a deficit of 22 million tonnes, or $446 million without the ETS’. This is misleading. Unlike the very real costs that will be imposed on all New Zealanders due to the ETS from July 1, the $446 million figure is purely hypothetical," Mr Boscawen said.
"Dr Smith’s calculations factor in the cost to the Government when foresters fell their post -1990 trees after 2012. However, this cost is illusionary. Given that no successor agreement to the Kyoto Protocol has or is likely to be agreed to, from 2013 there simply will not be any obligations for New Zealand to meet.
"Moreover, in any event, the international political reality is that any obligation that does eventuate would not be enforced; as evidenced by Canada’s recent refusal to pay any shortfall it might theoretically be liable for.
"Nick Smith should not be using theoretical costs that he knows are highly unlikely to eventuate and would not be enforced even if they did to justify the very real costs he is imposing on New Zealanders. We deserve better.
"The reality is, that come July 1, all New Zealanders will be faced with a five percent increase in electricity prices and a four cents per litre increase in petrol prices. These are real costs that ordinary New Zealanders will have to pay solely because of the ETS. By contrast Dr Smith’s $446 million is a purely theoretical figure that in all likelihood will not eventuate.
"Contrary to Dr Smith’s assertions the ETS is not saving New Zealanders any money at all.
"Dr Smith is doing New Zealanders a disservice by trying to confuse this important debate further with statements such as the one today. I call on him to stick to the real costs and to spend his time justifying to ordinary New Zealanders why their electricity and energy costs are about to increase needlessly, rather than to issue meaningless press releases like the one today," Mr Boscawen said.