Magazine article New Zealand Management

JUST GOOD BUSINESS: Fun Begins When Emissions Pricing Dust Settles

Magazine article New Zealand Management

JUST GOOD BUSINESS: Fun Begins When Emissions Pricing Dust Settles

Article excerpt

Byline: Peter Neilson

Once a price is put on greenhouse gas emissions, the focus will move to avoiding it.

Large emitters, whose businesses are at risk from offshore competitors which do not face a price on carbon, will be sheltered with appropriate transitional emission subsidies, but still benefit from cutting emissions. Exposing businesses and households to the cost of emissions will have a major effect.

The incentive to avoid or reduce the cost of emitting will ripple through all businesses and households through electricity and fuel costs. It will make major investments in low-emission capital projects more profitable. The incentive will drive the hunt for ways to reduce current emissions a[euro]" and extend the life of, and cut emissions from, potentially stranded assets, ranging from cement works to coal-fired power stations.

It will also see the demand for more energy-efficient, lower-emissions products and services mushroom.

It will accelerate a current trend to buy goods and services on a whole-of-life cost basis, rather than day-one price. The latest ShapeNZ research indicates 21 percent of organisations are now procuring sustainably. With this practice spreading through the $25 billion in state procurement contracts, this market segment can only grow.

According to ShapeNZ polling, business people most of all understand the value of sustainable procurement and practice.

The effect of pricing emissions on infrastructure development could be valued at billions. The Minister for Climate Change Issues, Nick Smith, says he wants a carbon price signal on energy as a priority a[euro]" to influence investment in renewable energy.

Research by SKM, commissioned by the Business Council in September last year, estimated emissions pricing, through an emissions trading scheme (ETS) should:

a[euro]cents Result in immediate and long-term investment valued at more than $12.358 billion over the first 10 years. Some $913 million a year of this is available immediately.

a[euro]cents Generate 9600 new jobs. Of these 4815 will be created directly, 4215 immediately. Large numbers will be created in agriculture, forestry, wind, geothermal, bio energy, bio fuel, bio char, ocean energy, and energy-efficiency industries, and more in new emissions trading and services.

a[euro]cents Result in $5.56 billion in new wages being paid in the first 10 years.

a[euro]cents Increase dairy farm incomes by $714 million a year by applying current emission reduction technology, providing 1728 new direct jobs, with an annual wage value of $98. …

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