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Kyoto pact could see weak NZ economic growth - NBNZ |
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| NEW ZEALAND: November 30, 2001 | ||
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WELLINGTON - Ratifying the Kyoto pact on climate change may reduce New Zealand economic growth by as much as one percent, the National Bank of New Zealand said yesterday. The NZ government said in August it would seek to ratify the Kyoto Protocol by September 2002, after a compromise agreement was reached at a meeting in July of around 180 nations at a United Nations conference in Bonn.
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New Zealand's commitment to reducing emissions was commendable but problematic as it would place the country at a competitive disadvantage, the National Bank, owned by Britain's Lloyds TSB , said in a commentary, adding it could lead to a substantial and permanent output loss. "The transitional dip in activity will be considerably more. Economic growth from 2008 to 2012 could be weak as a consequence." The bank said its calculations, based on a range of shocks to the price of domestically produced goods, suggested a permanent impact on output of 0.5 percent to 1.0 percent of GDP. "The potential loss of activity would be far greater if not for a substantial fall in the value of the New Zealand dollar against all non-ratifying nations." The Protocol's exclusion of developing countries, who account for most of the growth in emissions, would do little to stablise or reduce global warning, the bank added. New Zealand has agreed to reduce emissions to 1990 levels, with any above that point needing to be offset by emission credits bought on an international market, or carbon absorbing activities such as planting trees. The National Bank said the NZ government's unwillingness to use 'forestry sinks' made little sense as they could play a key role in smoothing the adjustment to different price signals. The centre-left government of Prime Minister Helen Clark is considering negotiated greenhouse pacts for energy-intensive industries and those with high emission levels, but also faces a particular problem with its rural sector. The country of just under four million people has 50 million sheep and cattle. Belching and flatulent livestock produce 44 percent of New Zealand's greenhouse gases, compared with less than 10 percent in most developed countries.
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Story by Catherine Wallbridge
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REUTERS NEWS SERVICE
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