What a lot of people don’t seem to understand is that an emissions trading scheme has two points: 1) encourage reductions in emissions 2) allocate the cost of emitting.
The ETS does not, ultimately, create the price on carbon for New Zealand. That is created by our international committment, along with other countries, to limit our carbon emissions relative to 1990 levels. If we emit more than we agreed to, we have to buy credits from other countries who have kept their promise. If we do meet our commitment, every tonne of carbon emit is still a credit that we don’t get to sell on the international market. If we were to really cut our emissions, selling the carbon could be a nice little earner for the country and that is the opportunity cost of emissions.
Without an ETS, the cost of emissions is borne entirely by the taxpayer via the government. An ETS should attempt to put the cost on the polluters instead and, thereby, get them to decrease their emissions (which, remember, is the whole point of all of this). National’s ETS, by giving a free, uncapped allocation and putting a top limit on the price of carbon, just gives a huge subsidy from the taxpayer to polluters – $430 million a year by No Right Turn’s estimate.
$430 million that could be going on public services or job creation or emissions reduction research or even tax cuts, instead going to protect polluters from facing the cost of polluting and encouraging them to keep ruining our climate. What a crock.
More than that, climate change is an economic issue. If it were just a bit of flooding, some coral bleaching, and some forest fires, frankly I wouldn’t be happy but I wouldn’t be too wound up either but climate change is much more than that. It is the undermining of our economy. All human economies are based on the climate they exist in – change the climate, bugger the economy.
There’s no such thing as balancing the environment with the economy. It is the economy, stupid.