08 September 2012

ASEC ETS Study Quoted in Fletcher Building Submission

Andrew Shelley Economic Consulting Ltd (ASEC) recently conducted a study for Fletcher Building, the Impact on NZ Steel Manufacturing of the Australian and New Zealand Emissions Trading Schemes. This study was cited in Fletcher Building's Submissions on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, submitted to the Finance and Expenditure Select Committee. The executive summary from the ASEC report is included as an annex to Fletcher Building's submission.

This study compared the impacts of the NZ ETS and the scheme proposed for steel manufacturing under Australia's Clean Energy Futures Plan. The relatively favourable treatment received by Australian steel manufacturers would make steel production in New Zealand less attractive, possibly resulting in the long-term run-down of the Pacific Steel plant. The potential shift in production to either Australia or Asia would result in consequential increases in greenhouse emissions. Given the difference in emissions intensity, the increase in global emissions from production in Australia rather than New Zealand would be in the order of 125,000 tCO2 given projected production volumes in 2015.

The Fletcher Building submission also cites two early studies conducted by Mr Shelley while working for CRA International. Those studies, conducted for the Ministry for the Environment, analysed the impact of the (then proposed) NZ ETS on Golden Bay Cement and on Pacific Steel.