 Have you heard the joke about the ETS? They say it’s like if you need to lose weight: it’s easy -just pay someone else to go on a diet for you!
Some more details on the scheme are set out below, but it looks to me like a hidden tax, since as I understand the scheme, the forestry businesses must pay the value of the carbon credits back to the Government when the trees are felled (assuming they haven’t gone bust or spent it!). Surely the money would be better spent on R & D into cleaner & greener technologies e.g. solar panels that we can ALL afford, light but powerful batteries, eco-housing (by the way have you been to Design Builders Eco-Show Home in HN? -very interesting!) or durable wave-power generators that work 24/7.
It seems to me that it a huge wasted opportunity but there you are, what would I know -I’m not a politician eh?
 Emissions trading schemes are designed to operate within a cap on emissions, such as those agreed to by countries, like New Zealand, who have signed the Kyoto Protocol and made obligations under the Copenhagen Accord. The ETS is intended to place a price on greenhouse gas emissions and, as a result, encourage a move to less carbon intensive activities. It is a market based approach where emission units (or carbon credits) are traded between participants in the scheme. An emission unit is required for every tonne of greenhouse gas emitted. During the transition phase (July 2010 to December 2012), participants will also be able to buy emission units from the Government for $25 each.
Energy, industrial processing, liquid fossil fuels, waste, forestry, synthetic gases and agricultural sectors are likely to be participants in the ETS. The ETS specifies a number of activities and requires organisations or individuals undertaking these activities to participate in the scheme as Mandatory Participants. Voluntary Participants, being organisations or individuals carrying out a number of other specified activities, may also opt into the ETS. In general, the threshold for Mandatory Participation in the ETS has been set at a high level in the supply chain, for example fuel supply rather than fuel use.
 Only a small number of organisations will be directly affected by the ETS, but as it takes effect it will place an additional price on all carbon intensive activities and will alter the economics of many activities and businesses. This diagram, from the Climate Change Information website, illustrates how emissions trading will work using three different industries as examples.
Under the scheme, an oil company will need to buy units to cover the emissions that will result when the oil they sell is used. During the year the oil company sells oil that, when used, will result in 3 units worth of emissions. The oil company needs to buy 3 units to cover the emissions that it is responsible for. It does this by buying 2 forester units and 1 unit from an industrial firm.
A forester plants some trees. During the year these trees grow, earning the forester 2 units. The forester can now sell these 2 units. In this diagram the forester sells the 2 units to the oil company.
An industrial firm is given 4 units by the government to cover some of its emissions. During the year the firm installs a new plant that reduces its emissions to 2 units. Therefore it only uses 2 units and can sell the surplus 2 units. The industrial firm sells a unit to the oil company and sells the other unit on the Global Emissions Markets.
The ETS does not directly involve the majority of New Zealand’s SME businesses and does not require most SMEs to report on their emissions or to trade emission units. However, business owners can save money and make a difference in reducing greenhouse gas emissions by using energy more efficiently, reducing waste and, where economic, using renewable energy alternatives, such as solar power.
 The main impact of the ETS for most SMEs and households will be a rise in transport fuel and electricity prices and, from 2013, a rise in the cost of disposing of waste at landfills. Fuel prices have already risen and electricity costs are likely to increase by about 1c/kWh. There will also be a range of secondary effects, such as increases in the prices of some consumer goods as a result of increased freight charges and, from 2013, increased costs of disposing of waste at landfills. It has been estimated that the price impact on the average household of the ETS will be an increase of $165 a year. Let's hope it's not an optimistic figure!
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