An emissions trading subsidy for fishing?

by frog

The Hive noted on Friday that:

The revised [Emissions Trading Scheme] contains an enormous new subsidy for the fishing industry. This was, surprise, surprise negotiated by NZ First… Fish subsidies are the direct cause of over fishing. We are opposed to any subsidisation of this industry. The original ETS has no subsidy going to the Fishing Industry. Now they get 50% free allocation. This is an outrage. The Greens should be opposing this policy strenuously.

I agree with the Hive that this is not an ideal outcome. I wanted to find out more so checked with Jeanette before I wrote anything about what had changed in negotiations, and she said:

The Greens certainly aren’t keen to subsidise the fishing industry. However, it is the only trade-exposed sector that wasn’t to get any free units. That means, there is a process in the Bill whereby business that mainly competes with overseas firms who pay no carbon price get some of their emissions covered by free units. The idea is that if they don’t, they have a strong motivation to move overseas where there is no carbon charge, with no benefit to the climate but loss of jobs in NZ. The reason the fishing industry didn’t initially get any is that their energy source is diesel which as transport fuel, doesn’t generally qualify for free units because for every other industry it is used within NZ and not in competition with overseas firms. However for the fishing industry it is their main source of energy and they are directly exposed to competition from foreign fishers.

Every other trade-exposed industry is eligible for 90% of their 2005 emissions for free with the phase out starting only in 2019. Fishing will get up to 50%, and only for the first three years. Also, Peters didn’t oppose the 10 or so significant improvements we got to the scheme and he asked for very little – this was the main thing. One can speculate as to why, but it isn’t unreasonable in the context of the ETS as a whole. It is much less than the farming sector is getting, and they will still face the carbon price for half of their emissions so have an incentive to reduce carbon wherever they can.

So, while it sticks in our throats somewhat, it is short term and less than other industries are getting.

As it turns out peak oil could well curtail fishing companies sooner than a carbon charge would anyway.  All in all, while we’re not happy with this, it doesn’t seem worth dying in a ditch over either.

frog says

Published in Economy, Work, & Welfare | Environment & Resource Management by frog on Sun, August 31st, 2008   

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