Climate Change Minister Paula Bennett is not resiling from the end of the two for one subsidy on Emissions Trading Scheme units which has effectively doubled the ETS bill for some industries at the same time as the ETS price has jumped up to over $17 from around $5 a year ago.
“A few of those businesses that didn’t think they needed to change – they are having to, and that gets them thinking more about the plant that they might take on or how they might do it,” she told POLITIK.
“We’ve certainly been having some quite big discussions with Fonterra and others too.
“I think the price will dictate some of the behaviours, and that ‘s not a bad thing.”
But does the Government really want this happening in an election year?
“Look, they knew it was coming.
“We actually gave them three years for the two for one. Most of them were In a situation where hat they wanted was certainty so now they know where it is at.
“The price is not likely to drop below $17 I would have thought.
“So they have to adapt to that I think it’s a good thing.
“It’s what New Zealanders want; that there’s a bit more balance there and we are lowering our emissions, and that’s why you have a price and businesses think more about the way they are working.”
The ETS scheme is still not in its final shape.
The Government will later this year conduct another review of where it is at focussing on the ETS unit market and also on the role played by forestry in the provision of ETS credits.
“The Ministry for the Environment is still consulting, in fact, they right smack in the middle of it, so I am trying not to pre-empt where that goes, and I haven’t had the conversation with Cabinet or anyone yet, so we will see where that lands.
“But we are going to have to tackle some of the big stuff like the auctioning (of ETS units), like the cap stuff (caps on prices) because that is all on the table and I do not have a pre-conceived idea of where that lands yet.”