Published in the National Business Review of of 15 June 2007

Business organisations are using the government's policy on carbon emissions trading to test its commitment to robust policy analysis, regulatory impact statements and effective consultation.

Eight major organisations, Business New Zealand, the Chambers of Commerce, Federated Farmers, the Business Roundtable, the Road Transport Forum, the Major Electricity Users Group, the Wood Processors Association and the Greenhouse Coalition have written to the Minister of Energy, the Prime Minister and other ministers.

Their letter complains that with the detailed design of an emissions trading scheme already well underway, the government intended to consult affected parties at the same time as it was drafting legislation.

An officials' timetable showed six weeks had been allowed for this.

"This is not consultation in good faith. The time frame for developing, consulting on and implementing a policy of this significance to the New Zealand economy needs due process to be followed.

"Due process is specified in the Cabinet Manual and includes the requirement for a regulatory impact statement," the organisations' letter said.

Last week the Minister of Commence Lianne Dalziel said the government had an"absolute commitment to robust policy analysis, effective engagement with stakeholders and proposals for regulation only where there is a clear case to support that approach."

The business groups are wary of the government's intention to introduce a comprehensive emissions trading scheme covering all types of greenhouses gases and all sectors of the economy.

"This is a good deal more ambitious than the European system (which took some six years to bring in).

Our economy is not similar to those of the European countries and it will not be possible to simply pick up an existing trading scheme and expect it to work for New Zealand."

The groups wanted clarification about the implications for the NZ Energy Strategy of the proposed emissions policy. For example, what would happen to the country's emissions profile if the Huntly power station did not stop burning coal by 2012?

"In respect of an emissions trading scheme, there are major issues around methods of allocation, the level of the cap, and competitiveness at risk for New Zealand industry which require careful working through before a workable, fair and equitable scheme could be introduced.

"We flag strongly that the current timetable will not allow this to happen and we fear future policy failure instead of policy certainty will be the end result.

A spokesman for Energy and Climate Change Minister David Parker said that all of the groups had been consulted extensively already. They would be consulted again on the detailed design and would have a further opportunity for input during the select committee process.