The National Government’s decision not to extend the Emissions Trading Scheme to agriculture is a triumph of lobbying, and well as political pragmatism.
Concerned by business and primary sector lobbying, John Key was wise to leave himself a way out, when he said that if the 2011 Review found NZ was too far ahead, the scheme’s staged implementation would be slowed down.
There was a lot of money, principle and emotion at stake in the lead up to the start of the ETS. Even after the law was clearly going ahead, arguments continued over the technical details on emissions and measurements.
Most critically, lobbying continued even after the ETS started. National Ministers and MPs have not been allowed to forget the scheme. They were regularly provided with information on the costs of the scheme to businesses, on the impending costs to agriculture, and on the performance of other countries.
Thus, the Government was prepared to accept the findings of the 2011 Review and to face the interest-group pressure of a decision not to continue with the extension of the Scheme.
In a sense, the decision is a massive back-down. It turns out that the rest of the world has not followed New Zealand’s lead. Agriculture is still not subject to tax or emission unit trading in many other countries.
The change could theoretically undermine everything National had earlier claimed about the ETS. For example, National now says science and research, rather than tax, is now the way to get farmers to reduce their emissions. It’s unclear why this route didn’t apply two years ago, and why science and research is not good enough for energy and industry.
National was able to turn this into a triumph of pragmatism. Prime Minister John Key was able to point to his earlier preparedness to change the plan if there was evidence it should be.
Citing the impact on jobs and export value if the plan proceeded, National was able to reach out to a voting public now worried more by recession than environmentalism.
It was a classic demonstration of the value of never backing yourself into a political corner, and for lobbyists, of never saying its over.