Emissions effect on dairy, fuel prices
Making businesses pay for their cost to the environment would drive up the price of dairy and petrol, industry commentators say.
The Productivity Commission’s lowemissions economy draft report suggested introducing an emissions price, likely to be in the form of a tax or charge, for households and businesses to pay for each unit of greenhouse gas they produced.
The price should be at least $70 a tonne of gas and up to $200 a tonne in some cases, to motivate people to use less environmentally harmful sources of energy and create a net-zero emission economy, the commission suggested.
New Zealand’s carbon footprint is high per capita due to the country’s large agricultural sector and cars on the road.
Farming, transport and forestry accounted for most of New Zealand’s carbon emissions, in that order. Such a tax would hit those industries hardest.
AA petrol spokesman Mark Stockdale said the impact of such a tax on the economy ‘‘could be quite huge’’. It would cost more for companies to transport goods including fuel, which would increase fuel costs at the pump.
The report suggests motorists switch to electric vehicles.
Vehicles contributed 12 per cent to New Zealand’s overall greenhouse gas emissions, so replacing all vehicles with electric vehicles would not fix the issue entirely, Stockdale said.
Climate change action needed to be spread across all industries and the economy fairly to reach a net-zero economy, he said.
‘‘It should not just single out one sector or one activity that contributes to emissions.’’
Federated Farmers vice-president Andrew Hoggard said emissions pricing was one-sided and undermined the work farmers had done to improve their impact on the environment.
Making farming more expensive would put farmers at a global disadvantage and could possibly pull the plug on investment in the industry, he said.
‘‘This will put us on the back foot economically and also for consumers … every two or three months there’s an article complaining about the price of butter. Well, it’s only going to go one way – up.’’