Rather predictably the media is starting to imply that the difference in policy between Labour and the Greens concerning which system is best to address climate change is a sign that they cannot work together. A recent Fairfax article titled “Labour opposes Green’s Carbon Tax plan” contains the following passage:
Labour opposes the Green Party’s new carbon tax policy, saying the Emissions Trading Scheme (ETS) was its preferred option.
Labour leader David Cunliffe said today his party would negotiate with the Greens on the policy, but did not favour it.
“That’s the Green’s position, not ours,” he said on Firstline.
“Our position is in favour of an Emissions Trading Scheme, which is well managed – not one that’s been gutted by the current government policy.
“An ETS is probably slightly more complex, but slightly more effective in terms of allocating the costs and benefits of a carbon price across the board.”
The language in the article and the heading is rather strong. I do not read Cunliffe’s statements as opposition to a carbon tax, just that Labour’s preference for an ETS is based on it being slightly more effective even though it is slightly more complex. And a carbon tax was the party’s previously preferred method of complying with the country’s Kyoto obligations as I noted in a previous post.
To those claiming that Labour has shown some sort of weakness by not being able to change its policy in the three days since the Green’s Carbon tax announcement they do not understand how policy is adopted in the Labour Party. There is a full constitutional process where the party’s policy council has an ongoing role to prepare and refine the party’s policy platform and Annual Conference reigns supreme. Currently the Policy Platform says:
4.12 Labour wants New Zealand to honour its international commitment to reduce our gross greenhouse gas emissions through good science and responsible behaviour by companies and individuals. We will encourage the development of mitigation technologies and industries, such as forestry. We will make sure our Emissions Trading Scheme has environmental credibility as an ‘all gases all sectors’ scheme, ultimately free from subsidies to greenhouse gas polluters.
Cunliffe is correct in respecting the party’s constitution. He would be pilloried if he was to unilaterally change party policy.
The differing policies create an interesting debate. Which is better? A carbon tax or an emissions trading scheme?
Both systems put a price on the production of greenhouse gasses. Basically an ETS is more complex and attempts to drive up the price of polluting depending on how much over a set cap GHGs are being produced whereas a Carbon Tax is a more straight forward tax on GHG production. If you want a more detailed primer on the differences between the two systems this Guardian Article is helpful.
The Green’s proposal is simpler. A straight forward $25 a tonne of GHG equivalent will be paid by major polluters. Foresters will receive a credit of $12.50 for every tonne of CO2 sequestered.
And it is clear that Labour’s ETS has been effectively guttered by National’s changes and needs to be strengthened. Not only is agriculture not in the scheme but major polluters have no incentive to do anything. Things are that bad that the petrol companies have discovered that they are able to profit from the scheme by receiving locally sourced credits and then purchasing much cheaper overseas credits to cover their obligations. The incentive to do something to address climate change is effectively nil.
Hopefully Labour and the Greens will gain power at this year’s election and can then have a robust discussion on what system is best. But current differences of opinion should be regarded as being nothing more than the pursuit of the best possible means of addressing what both parties agree is one of humanity’s most pressing problems.