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Smith Claims ETS Strikes `Balance' Between Jobs And Emissions

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Oct 28 NZPA - Climate Change Minister Nick Smith says the Government's emissions trading scheme strikes a " good balance" between providing jobs for New Zealanders reducing emissions.

Dr Smith yesterday challenged Opposition MPs in the debating chamber over why they were criticising a scheme similar to those proposed in Australia and other developed countries, which balanced "sensible economics and environmental responsibility".

Dr Smith was responding to Labour's Charles Chauvel, who sought to table a submission to Parliament's finance and expenditure committee showing that the taxpayer subsidy to one of the world's biggest miners, Rio Tinto, will effectively be $225,000 a year for each job at the miner's Tiwai Point aluminium smelter.

Mr Chauvel asked whether if was fair for hard-working New Zealand taxpayers to subsidise Rio Tinto when the Government was axing accident compensation prevention programmes to cut costs.

It followed criticism yesterday by Kent Duston, of Wellington-based Autonomic Consulting -- a member of the Green Party since 2006 -- in a report by a specialist carbon market information service, Carbon News.

"It would be cheaper for the New Zealand taxpayer to pay every single Tiwai Point worker and contractor $200,000 per annum for the rest of their lives to simply stay home," said Mr Duston.

He based his calculation on free carbon credits Rio Tinto will get, plus the "opportunity cost" of using the Manapouri hydro electricity at the smelter instead of using it to replace the Huntly coal-fired power station.

He calculated the costs after hearing Dr Smith say that subsidies were needed to protect New Zealand jobs.

"We keep hearing that it's jobs, jobs, jobs, but nobody is asking the questions about the cost of those jobs," said Mr Duston.

The Rio Tinto Alcan (New Zealand) group has a 79 percent stake in New Zealand Aluminium Smelters which runs the Tiwai Point aluminium smelter near Bluff.

Representatives of the smelter operation earlier this year told a select committee Tiwai Point would be the first smelter in the world to come under an emissions trading scheme (ETS).

Mr Duston said the plant produced 1.9 tonnes of carbon dioxide for every tonne of its 330,000 tonnes of aluminium production -- an emissions profile of 627,000 tonnes a year.

At the proposed capped price of $NZ25 per tonne, these emissions would cost the smelter's owners $15.675 million a year, and under the proposed changes to the ETS, 90 percent of the emissions units -- worth $14.13m -- would be given to the smelter free.

The smelter's emissions level was artificially low because it already had subsidised electricity from the Manapouri hydro power scheme. Taxpayers could save $209m a year by replacing Huntly with Manapouri , made up of the non-payment of the Rio Tinto subsidy ($14m) and the non-payment of the Huntly subsidy ($195m), he said.

There were 800 staff and 130 contractors employed at Tiwai Point, but the annual cost of retaining these jobs was "exceptionally high -- a stunning $225,000 per job".

Rio Tinto Alcan (New Zealand) accounts show it made a profit of $19.1m in 2008, down from $204.5m in 2007. Revenues from continuing operations fell to $1.06 billion from $1.13 billion. A dividend of $575.6m was paid.

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