Sweeping the ETS under the carpet

Written By: - Date published: 4:01 pm, May 25th, 2010 - 9 comments
Categories: Environment, ETS - Tags:

According to Newsroom [currently offline]:

No money has been budgeted to pay for New Zealand’s contribution to a $44 billion component of the Copenhagen Accord on climate change or to withstand losses from the emissions trading scheme beyond Kyoto’s lifetime. The gaps in last week’s Budget have raised fresh questions about the Key government’s commitment to curbing greenhouse gases despite Prime Minister John Key’s continued insistence that the ETS rollout will not be further deferred.  Mr Key says he does not know why the sums are missing from the Budget but speculated that Treasury could not register a liability or asset beyond Kyoto’s first commitment period without a fresh international commitment…

Last year when the revised ETS was going through Parliament, Treasury calculated that the long-run costs of the changes, particularly granting big industrial emitters and agriculture more free carbon credits for longer, could cost $110 billion or 13 to 17 percent of GDP by 2050 an estimate Mr Key dismissed at the time as nonsense. However in the Budget papers, the Treasury says that beyond 2012 when Kyoto expires, it has modelled the ETS net revenues to be neutral ‘as New Zealand has no international commitments beyond this period’. It adds that net revenue is assumed to be recycled back to the public through fiscally equivalent, unspecified tax reductions or spending increases.

I agree with Labour’s Charles Chauvel who asks:

‘It begs the question why would we have gone through all of that and put the markets and New Zealand consumers through the convulsions we have if we’re just going to revert to a revenue recycling scheme.’

Or is it because National’s budget was already so much in the red they didn’t want it to blow out even more?

9 comments on “Sweeping the ETS under the carpet”

  1. So they have a line in the budget representing an “adjustment for macroeconomic effects” but do not have a line for a liability that is almost inevitable.

    These guys are making it up as they go along.

    • Lanthanide 1.1

      Yes, very scary point, Micky. I’ve said a few times that I think National’s budget was ok, but if and only if we met the treasury predictions. Given that those predictions didn’t include the likely cost of carbon in the future, we can pretty much say the predictions are dead in the water, and we didn’t even get out of budget month yet!

      • mickysavage 1.1.1

        And the decision to give the wealthy a tax cut based on these shonky predictions is unforgivable.

        David Cunliffe is right. This looks like an attempt to justify the windback of public services and the sell off of the public’s assets.

  2. todd 2

    Sweeping the ETS under the carpet—- Best news I have had all month

  3. Santi 3

    Key’s government hands in my pocket! This is another tax from National.

  4. Santi 4

    Is Key benefitting personally from carbon trading? I wonder.

  5. If you dont like carbon trading, but are concerned about climate change – come to climate camp this year

    facebook: Camp for Climate Action Aotearoa

  6. The ministry that wants to mine national parks for coal, also wants the taxpayer to pay for carbon credits.. how surprising:

    ‘Who runs the scheme?: The Economic Development Ministry.’


  7. Bored 7

    I am beginning to think “who cares”? The language of economics and politics as expressed by our political and financial classes seems to be totally at odds with reality. The climate will speak its own language, and a lot louder than that spoken by these people. They may not care to hear it, but I can assure you they (and all of us) will.

    Its a bit like having eaten at the restaurant and ordering another course knowing that there may not be credit on your card…the bill will be settled one way or another, and it may not be pleasant.

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