7 Jul 2009

Greenhouse gas emissions cuts will be costly - study

10:59 am on 7 July 2009

Cutting greenhouse gas emissions by 40% could increase electricity and gas prices by half and raise petrol prices to $3 a litre, new research suggests.

The research, by economics consultancy Infometrics, was commissioned by the Greenhouse Policy Coalition which represents large companies highly exposed to emissions pricing.

New Zealand is at present debating targets for emissions cuts up until 2020. Greenpeace and other non-government organisations want New Zealand's emissions cut by 40% to avert climate change.

Infometrics economist Adolf Stroombergen, says at that level of emissions cuts, the average person would be $3,200 worse of a year at 2020, while the price of gas, electricity and petrol would rise significantly.

Geoff Keey of Greenpeace says the research is looking only at the cost of making cuts, and is not considering the cost of failing to make cuts.

Extreme weather events caused by climate change will threaten New Zealand economic base, he says.

The Minister Responsible for Climate Change Issues, Nick Smith, is heading a series of public meetings about the 2020 target.

He says the report will help people understand the costs and benefit of emissions reduction.