There’s a rising crescendo of protest about the costs of the Emissions Trading Scheme (ETS):
Taxpayers face $1b Kyoto liability – authors
Emissions scheme could cost NZ up to $5b
Scoop Images: Emissions Trading Scheme Protest
… and so on.
All too often the commentary completely misses the point. The goal of an ETS is not just a random extra cost being imposed on the economy. The point is to serve as one of those “price signals” that economists are so fond of. The point isn’t to just blindly pay more, it is to change our behaviour so that we don’t have to. Guyon Espiner gets it, Claire Browning gets it, too many commentators do not.
Of course the Nats have completely stuffed up their ETS – in two major ways. First, they have designed a crippled, ineffectual ETS, that loads costs on to the taxpayers instead of the big polluters. Nick Smith admits that this ‘moderate’ ETS is not going to ‘result in big reductions of emissions’. Both Treasury and the Environmental Commissioner have, ever so diplomatically, called it crap. So have academics:
The authors of The Carbon Challenge – Victoria University researcher and economist Geoff Bertram and climate-change analyst and researcher Simon Terry – also describe the Government’s current ETS as “technically obsolete” and “beyond rescue” as a sustainable framework for tackling climate change. They say the scheme will not make any inroads into cutting New Zealand’s gross emissions levels.
This first stuff up is already terminal, but National are compounding it with a second. They are not responding in any positive way to what is left of their own price signal. There’s no leadership. They are not challenging the growing perception that the ETS is just a random tax with no purpose. Where’s the plan National? Where’s the way forward? The Green Party gets it. Some in the business community get it:
Top New Zealand businessmen are consummate brand builders and united by a common belief: that New Zealand is looking a gift horse in the mouth by viewing the world’s inexorable move towards a low-carbon economy as a cost, rather than an economic opportunity. …
Plenty of people get it, but the National Government does not. So they have brought us the worst of all possible ETS schemes. Badly designed and devoid of vision. An ETS with all of the costs and none of the benefits. They fully deserve the growing backlash. Nice one National – great work.