web analytics

It’s the economy, stupid

Written By: - Date published: 5:48 am, September 15th, 2009 - 36 comments
Categories: climate change - Tags:

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.

36 comments on “It’s the economy, stupid ”

  1. Avidwatcher 1

    “It’s the economy, stupid”

    And that is why the ETS was NEVER going to work. The NZ economy can’t bear the cost of applying what is essentially a worthless (without full global participation) taxation and political posturing exercise. The sooner we pull out of paying other countries cash on some half baked premise the better.

    And before you launch into one Marty, there is no proof global warming is
    a) actually occurring now v.v. a cyclical change
    b) if it is actually happening its not too late to make a jot of difference
    c) a freakin half baked ETS taxation will make any difference at all

    • ieuan 1.1

      Avid make sure you write those reasons down so that in 50 years time you can explain to your grand children why we did nothing even though everyone else said there was a massive problem.

      • peeringthroughthemurk 1.1.1

        “everyone else”

        Grow up. The science is less than proven and the answer sure as heck aint a half assed ETS, and it will never be. How bout you start living sustainably, no more plastics in your life would be a good start, let me know how it goes for you.

        • Pascal's bookie

          “The science is less than proven ”

          Strawman, the science is never ‘proven’. There is however an enormous amount of evidence for AGW, and an overwhelming majority of the experts agree that it is a real problem.

          “the answer sure as heck aint a half assed ETS, and it will never be”

          Agreed, but take it up with the stupid government. Most people here want either an ETS with teeth, or a carbon tax with same.

          “How bout you start living sustainably, no more plastics in your life would be a good start”

          False dichotomy, ad hom, generally stupid.

          capture: inadequate.


        • Clarke

          Grow up. The science is less than proven

          Another fact-free assertion from the CCD brigade.

          If you’re not bright enough to understand the implications of the science and to comprehend the dynamics of complex non-deterministic systems, then please say so. Perhaps someone will oblige by creating a course in basic climate science for the special needs students in the thread.

          Of course, it could well be that you are smart enough to understand all these things, and instead – like the Maori Party – you’ve simply decided that selfishness is an easier path than taking responsibility for your actions.

        • ieuan

          Science doesn’t prove things. It says ‘based on the data this is the most likely explanation’. If something is ‘proven’ it becomes a ‘law’, there are very few laws in science.

          There is lots of very strong evidence that mankind’s actions are having a profound and detrimental effect on the earths climate. We have an opportunity to do something about this and for the sake of future generations it would be criminal if we didn’t.

          As for ‘no more plastic’, I live in Christchurch and they have an excellent curb side recycling system, I try to reduce my impact (energy efficient light bulbs, more fuel efficient car, recycle etc) without being stupid about it.

          What are you doing??

        • lprent

          Ah yes, “The science is less than proven…”. Where did you get that from? Your navel? Wishart? As similar as those two are, they do not constitute any level of authority.

          On the other hand the climatologists and earth scientists who have come to the opposite conclusion do have credibility and the training to assess the science that you (and anyone you care to call to support your thesis) lack.

          For instance you’re saying to stop using plastics. That simply confirms your lack of understanding. Plastics are sequestered carbon if no ignorant bugger burns them. With the exception of exothermic plastics, they are reusable. Ignoring other environmental issues with plastics, not using them does very little for the atmosphere.

          However not using a car, not eating dairy. or not using power from a coal-fired power station does. Try not using those.

        • Zaphod Beeblebrox

          So what level of CO2 would you and John Key be comfortable with? 400, 500, 600 or 700 ppm?
          Last time earth had those levels of CO2 the oceans lost 99% of its biologocal activity and live on earth consisted of small vertebrates grazing ferns in Greenland.

          • gargoyle

            Climate will change whether due to human actions or not just depends how fast it does so and how we can adapt to or mitigate its effects.

            Your post did, however, remind me of this graph which shows just how changeable the earths CO2 levels and temperature is over huge time periods – not really relevant to this thread but fascinating none the less.


  2. lprent 2

    Exactly. I also think that the government cutting the fast forward fund that was targeting our biggest pollutant sources was stupid and short sighted. Despite assurances of an alternate plan and funding, none has been seen, nor is likely to.

    This government is planning to pass a big tax payer funded subsidy directly to pollutors. Both in the short term and the longer term.

    You notice nick smith is busy lying again. I guess he can’t help himself

  3. sk 3

    Great post. There is another element. It sounds like forestry owners will be able to sell their credits offshore, so we socialise the losses (local CO2 emitters) and privatise the gains . .. .

    Sounds like the making of a fiscal crisis down the road

    Socialisation of losses, privatisation of gains is what the modern right is about (think BNZ collapse, Telecom privatisation in late 1980’s).

  4. lprent 4

    Avid. So if I can summarize your position on climate change.

    I don’t give a fuck about who it hurts, so long as it does not cost me now.

    Hey you’d have gotten on well with the appeasers prior to ww2. Hardly a responsible position though. What are you? A mindless adolesent? Or more likely an ACToid, which is pretty much the same thing.

    The science is solid, especially amongst the people who actually study it. See my post at the weekend.

    The ets is flawed, but it is a start. It has been over a decade since we signed up for Kyoto. This version of the ets us going to cost taxpayers a bundle, and I’m dying to see what the greens say about it.

    But at least this will get you paying for your responsibilities

    • Galeandra 4.1

      This version of the ets us going to cost taxpayers a bundle, and I’m dying to see what the greens say about it.

      If only they WOULD say something. Frog blog’s green shoots are all withered at moment- probably burned off by the CO2 enriched M.P. breath.

  5. Avidwatcher 5

    Ha ha, you’re a riot. IN response.

    “Avid. So if I can summarize your position on climate change. ”
    Please do

    “I don’t give a fuck about who it hurts, so long as it does not cost me now. ”
    No, you’ve started on the character assassination meme. Cheap.

    “Hey you’d have gotten on well with the appeasers prior to ww2.”
    Trying to tar and feather viz a vis collaborators in pre nazi Germany, getting cheaper.

    “Hardly a responsible position though”
    No shit

    “What are you?”
    Weighing up the reality of the ETS.

    ” A mindless adolesent?”
    More abuse, quality rebuttal

    “Or more likely an ACToid, which is pretty much the same thing.”
    Yeah, good one.

    “The science is solid, especially amongst the people who actually study it.”
    Its a judgment call at best

    “See my post at the weekend.”
    Having a, what? earth science degree doesn’t count

    “The ets is flawed, but it is a start.”
    Yes, a false start

    “It has been over a decade since we signed up for Kyoto.”

    “This version of the ets us going to cost taxpayers a bundle, and I’m dying to see what the greens say about it.”
    Less of bundle than the previous model, and who cares what the greens say.

    “But at least this will get you paying for your responsibilities”
    It is a regressive stealth tax that will impact on the poor and fixed income members of society. But you don’t care as long as your rigid and flawed idealogy genuflects to the UN gods of ‘climate change’.

    • Clarke 5.1

      But you don’t care as long as your rigid and flawed idealogy genuflects to the UN gods of ‘climate change’.

      But you don’t care as your skepticism is nothing more than dogmatic ideologically driven selfishness in a pseudo-scientific wrapper.

  6. lprent 6

    Avid. In other words

    You don’t know the science. You prefer not to deal with it. You prefer not to pay for the consequences of your actions. There is no argument in either of your two comments.

    Classic adolescent avoidance behaviour. No amount of petulance will stop everyone else seeing that.

  7. peeringthroughthemurk 7

    What are You talking about. I discussed your points (an 80% tar n feather meme).

    The rest of your diatribe is opinion, not fact.

    Then you finish with more abuse. Quality.

    Keep up the good work.

    No wonder the Maori Party prefer to deal with the Nats.

    • lprent 7.1

      Nope you didn’t deal with any point that I raised.

      What I said (albeit phrased to provoke and elicit what your mental age is) was that as far as I could see your position is that you don’t really give a damn if climate change was happening or not. But whichever way you didn’t want to pay for it.

      That is pretty much what you confirmed by not discussing that point, including that you don’t understand what a earth sciences degree covers, that you really don’t understand the issue, and that you’re viewing it through some ideological filter.

      I confirmed that you had a mental age of a adolescent and thereby provided a guide for other readers of how much credence they should give your ideas.

      I see ieuan above (who I frequently disagree with, but respect the opinion of) came to much the same conclusion

      • watchingthezoo 7.1.1

        Quality laughs at the standard again. And then Lyn pipes up with a curmudgeonly little foot stamping routine. Watch the blood pressure now.

  8. Lanthanide 8

    Someone ultimately has to pay and it would be the public in either case. Either directly as taxpayers, or indirectly when the cost of all goods and services rise. The latter certainly has a much larger vocal outcry from the ignorant masses than the former, because the former is mostly invisible to the ignorant masses.

    In that respect, National’s path may actually be the way to go.

    • lprent 8.1

      There is that.

      However that really doesn’t provide a market signal to the producers of the emissions or to the consumers of their products. Therefore there is unlikely to be any shift in behavior from this ETS.

      Besides most of our emissions are produced for export. We wind up paying for them and the overseas consumers get them cheap, with the long suffering local tax-payers coping the difference (as I understand the responsibilities).

      • Clarke 8.1.1

        The most egregious example is the Rio Tinto aluminium smelter at Tiwai Point. They import ore from Australia, refine it here, then export ~90% of their production overseas (mainly to Japan), while NZ taxpayers pick up their tab for the CO2 emissions.

        To add insult to injury, they use 15% of NZs electricity. If this renewable energy from Manapouri were to be added back into the national grid, we could easily decommission Huntly, further reducing emissions and savings the taxpayer real money in buying carbon credits.

        Last time I checked, Rio Tinto had declared profits of US$2.45 billion for the first half of the year and intended to pay out at least US $1.75 billion in dividends in 2010 – exactly the kind of company that needs a subsidy from the New Zealand taxpayer.

        Their shareholders must be laughing all the way to the bank at the sheer ineptitude of NZ politicians.

        • Lanthanide

          As I understand it, the plant at Manapouri was specifically built for the aluminium smelter to use. Yes, without the smelter, the plant probably would have been built eventually, but it may have been a lot later than it was, and potentially with a smaller capacity than it has now. Also the smelter is the major employer in Bluff and has large economic benefits for all of Southland.

          So yes, it sucks that in the future they may be able to lump us with the CO2 bill and take all the profits, but in general I think the country is better off with the smelter being there.

          • George D

            It’s not an either or, though. We’re upholding contract written by Robert Muldoon, when we know we could be doing a lot better.

            • Clarke

              Technically, it’s even worse than upholding Muldoon’s contract – we’re subsidising it with tax dollars simply to keep Rio Tinto’s bottom line from being impacted by their very real environmental costs, which weren’t even contemplated by Muldoon. Us taxpayers are indemnifying Rio Tinto!

              And the jobs argument is a completely spurious one. We know that Tiwai Point produces 1.9 tonnes of CO2 per tonne of finished aluminium, and that they produce around 330,000 tonnes of metal per annum – so direct emissions are about 627,000 tonnes/annum. At at nominal $25 per tonne, the subsidy is therefore $15.7 million per annum, or about $19,500 per worker at the smelter.

              Of course, those are just the direct costs. If we used Manapouri power to displace Huntly and other high-carbon power stations, we could easily avoid another 750,000 tonnes of CO2 from not having to burn coal – which is around $23,000 per worker at Tiwai Point.

              So in short, it would be cheaper for taxpayers to simply pay the current workers $42,500 per annum in perpetuity than to continue the sham of subsidising Rio Tinto.

              That’s the thing that gets me about the Tories – for a party that claims to represent business, they sure seem to have problems using a calculator.

            • Draco T Bastard

              for a party that claims to represent business, they sure seem to have problems using a calculator.

              But they don’t have a problem with supporting business when that support is essentially subsidies for those businesses.

          • Draco T Bastard

            but in general I think the country is better off with the smelter being there.

            Trying to maintain unsustainable practices doesn’t make us better off.

        • NickS

          Or, we could make use of NZ’s black sand deposits, which are known to contain commercially viable concentrations of titanium oxides and reduce it via the FFC Cambridge process which doesn’t release CO2. Although the pilot production plant isn’t online till 2010, meaning there’s probably a few issues that still need to be ironed out;

          Though there are obvious environmental issues with sand mining

  9. George D 9

    It’s not $430 million. That’s just industry, transport, and energy. Agriculture gets a whopping $800 million in subsidies.

    $300 from every single New Zealander, $200 of which goes to farmers. When you see a farmer next, remember to hand him your wallet.

    The workings are here – http://publicaddress.net/system/topic,2107.sm?p=131181#post131181

    • Draco T Bastard 9.1

      So, farming is costing us more and more and more. Why am I not surprised.

      • gargoyle 9.1.1

        Perhaps you need to remind yourself how important farming is to NZ- both in terms of employment and export earnings.


        • lprent

          We’re all aware of it. But that is EXACTLY the argument that Muldoon used with a similarly stupid policy of SMP’s in the 80’s. Damn near meant that supporting farmers bankrupted the economy and led to a hell fo a lot of pain in the farming communities that they remember rather clearly even now.

          So spend money on something like the fast forward fund while making sure that farmers pay for the cost of their emissions. I have enough confidence based on past performance that between the scientists and the farmers they’ll innovate themselves to better profits.

          Don’t cloud the price signals by coddling them

          • gargoyle

            If we go down the track of making our agricultural sector less competitive vs other suppliers it will be an unmitigated disaster for NZ.

            If agricultural exporting worldwide was more of a level playing field at present and going forward under a proposed ETS all fine and good but shafting it at present is nonsensical.

            • Pascal's bookie

              So what do you suggest hs, we all just subsidise the hell of out them to keep them on their toes eh?

            • Draco T Bastard

              Last time I looked our agricultural sector was close to, if the, most efficient in the world. The big problem with our agricultural sector is that it happens to be thousands of miles away from the markets. Not much can be done about that. In fact, we should probably be cutting our farming down due to it. Never mind that agriculture isn’t the best way to create wealth.

              National kept asking why our best and brightest kept leaving – maybe it’s because they don’t want to be farmers.

Links to post

Recent Comments

Recent Posts

  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Clean energy upgrade for more public buildings
    More public buildings will be supported by the Government to upgrade to run on clean energy, the Minister for Climate Change James Shaw announced today. Minister Shaw announced that Lincoln and Auckland universities will receive support through the Clean-Powered Public Service Fund to replace fossil fuel boilers. Southern, Taranaki, and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Schools back donations scheme for the second year
    More schools have opted in to the donations scheme for 2021, compared to 2020 when the scheme was introduced. “The families of more than 447,000 students will be better off next year, with 94% of eligible schools and kura opting into the scheme,” Education Minister Chris Hipkins said. “This is ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Ruapehu cycle trails gets PGF boost
    The spectacular Mountains to Sea cycle trail in Ruapehu District will receive $4.6 million in funding from the Provincial Growth Fund for two additional trails, Regional Economic Development Minister Shane Jones announced today. “This is an exciting development for the local community, and one that will provide significant economic opportunities ...
    BeehiveBy beehive.govt.nz
    3 weeks ago