National’s subsidies for polluters to cost $73 billion

Written By: - Date published: 11:36 am, October 14th, 2009 - 6 comments
Categories: climate change, national/act government - Tags:

A newly released government paper shows that by 2050 government debt will be $54-$73 billion higher than it otherwise would be due to National’s subsidies for carbon polluters.

According to the paper:

Treasury has modelled these costs [the free allocations to polluters] and, while the model has limitations, they estimate that, if a 1.3% phase out rate is maintained into the long term, the proposed policy settings for intensity based allocation indicate a cumulative increase in Government debt of around 6-8% of GDP by 2050.

The Treasury budget model gives GDP out to 2050, when it will stand at $914 billion a year, or $403 billion in today’s dollars. 6-8% of that is $54-73 billion nominal, or $24-$32 billion in today’s money. The annual interest bill alone will be staggering.

Make no mistake. National’s subsidy to polluters today will be paid for by our children and grandchildren in the decades to come.

6 comments on “National’s subsidies for polluters to cost $73 billion ”

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  1. JellyBean 1
    14 October 2009 at 11:42 am

    “National’s subsidy to polluters today will be paid for by our children and grandchildren in the decades to come.”

    future generations will be paying double – yes, in terms of the money – and, more importantly through the impacts of the government effectively encouraging pollution. oh, only as long as you produce more of course.

    way to go government.

  2. gitmo 2
    14 October 2009 at 4:25 pm

    Do you believe anything that comes out of treasury.

  3. snoozer 3
    14 October 2009 at 4:42 pm

    Treasury are ideologues but they can do simple modelling.

    No reason to think they dont’ have the basic fact right: we the taxpayer will be paying a lot for subsidising polluters forever ( yup – forever – the free carbon credit allocation decreases at 1.3% year on year, so never reaches zero)

  4. frog 4
    16 October 2009 at 3:12 pm

    Treasury may not be all we would like ideologically, but no one ever accused them of being innumerate! They can add, subtract, divide and multiply better than most. If they say this is a financial pig, it probably is.

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