Question time yesterday gleaned a little more information about the Government’s plans for the ETS – and showed the full extent of their ignorance of how the scheme works.Many people have been wondering what John Key meant when he said he would “put the ETS on hold” while it was reviewed. We now know it didn’t mean anything, but there is still a lot of uncertainty for business.
I had to ask three times what the practical effect would be of the statement in National’s confidence and supply agreement with Act, that the Government would pass “an amendment to the ETS delaying its implementation”.
First time he avoided the question and told us – again – about the select committee review.
The second time, he told us “no element” will be currently affected because the legislation will not begin until 2010 when energy comes in.
Only when I asked him directly about the effects on forestry, which came in almost a year ago and is expecting to claim credits in January for its 2008 carbon capture, did he say that the current rules about deforestation stay in place, pending the outcome of the select committee.
He didn’t actually say that foresters will retain their legal right to credits in January; however he can’t legally confiscate those without legislation, which he clearly isn’t planning before the those credits become due.
What was clear is that he had not thought at all about the effects of his statement on the forestry sector, who have been as puzzled as I have, and he confirmed that he has not talked to them.
So it seems we have established that foresters will be able to apply under the existing Act, which will not be “on hold” in any way at all, for credits to be transferred to their account in the NZ inventory, some time in January. But this is only step one.
There will be no market for those credits, at least for a year and maybe much longer, as he intends to amend the legislation before the end of 2009, and if obligations are removed the market for those credits will also be removed.
Let’s not be surprised if no-one plants anything more.