Why would someone who believes climate change is a hoax and human activity is not contributing to climate change, want a carbon tax? Why would you tax fossil fuels if you don’t believe they are doing any harm? Why would a party that has campaigned on a carbon tax since 1993 and accepted the ETS only reluctantly, not welcome the chance to revert to a carbon tax now?
Why would a “mainstream” party that campaigned on an ETS – but a different one – set up a select committee enquiry into maybe preferring a carbon tax?
What does Key mean when he says the ETS will be “put on hold” when most of it won’t be operational for more than a year anyway?
Why would a government that has set a target of reducing greenhouse emissions 50% below 1990 levels by 2050, oppose and dismantle every measure that could help achieve that, while at the same time reviewing whether there should even be a pricing signal?
Why would a government that wants to be taken seriously internationally, on the eve of the next climate change talks, set up a committee of politicians to review whether the scientists of the IPCC, the Royal Society and NASA, etc., know what they are talking about, or whether an alternative view is “right”?
Why would a government that aims primarily at economic growth and positions itself as business friendly create such policy uncertainty that international investors withdraw from New Zealand?
Most of these bizarre situations can be explained by the transition from opposition to minority government.
Key has set up a carefully balanced government where he can go as far to the right as he wants and justify it as “Act made me do it”. But he doesn’t have to go an inch further than he is comfortable with – “sorry Rodney, Maori Party won’t go there”.
It will be a true National government, able to do pretty much what it wants.
So Rodney’s posturing about scrapping the ETS was just a distraction and a nuisance during government formation. “You want to scrap the ETS Rodney? Let’s put that to the select committee. You want to review the science? Good idea. They can do that too. You think a carbon tax would be better? Fine – let them consider that.”
So Rodney calms down and the government is formed. The test will be when the chair of the committee arrives with a draft terms of reference, and Act has only one vote on the all-party committee. What that will really tell us is whether National is seriously committed to major delay. Considering a carbon tax and reviewing the science as well as considering National’s proposed amendments to the Act would be a huge job. It would take well beyond 2009. Meanwhile taxpayers are covering the cost of 100% of our emissions. Oh – but high income earners will be paying less tax.
Of course, Act doesn’t really want a carbon tax. Neither does the Business Round Table (BRT) which has been advocating it. But it gives them three advantages:
- more delay – so there is no price for as long as possible;
- if there is a carbon tax, it will be low, and cause a huge political fight whenever a government tries to raise it. The BRT is talking of $5-10/tonne, while the international carbon price for quality units is around $30-40.
- A carbon tax can be repealed as soon as there are the numbers in the House. An ETS creates property rights and cannot easily be done away with.
Under these conditions it’s not surprising that the Greens are not leaping at the chance to go there. Also, trying to apply it to agriculture and providing assistance for industries competing internationally with firms with no carbon price create the same problems as with an ETS.
I can’t believe that Key doesn’t understand that the only part of the ETS that is operational before 2010 is forestry, and that to “put the ETS on hold” either means nothing at all, or it means taking away the credits for planting over this last winter, which foresters are entitled to expect under the legislation, and taking away the deforestation penalty. This would lead to a huge deforestation this summer for conversion to dairying – exactly what Nick Smith endlessly criticised Labour for during 2007. To “put on hold” the ETS would require legislation before Christmas to amend the starting date for forestry – with all the international derision and challenge in Parliament. My pick is it was a figure of speech to keep Rodney happy.
Rumour has it that when Key complained about the air travel emissions tax in the UK, he was told to pull his head in and get his own house in order carbon-wise before he became a laughing stock internationally. He may be finding the hard way that sound bites that go down well with the uninformed on the campaign trail raise eyebrows in informed circles around the world and are not so simple to implement.
It must have been embarrassing when Nick Smith announced the cancelling of the green homes insulation fund (negotiated by the Green Party as part of the ETS agreement) and Key was announcing infrastructure spending to keep jobs and businesses afloat during an economic crisis, that Brian Easton was saying on radio that the home insulation fund was one of the best ways to keep jobs going because it could be done fast with little capital and only a very short training period. So should we expect an amendment to the ETS legislation, which has cemented the fund in law, to remove that clause? Will it be called the “ETS (keeping NZ homes cold and damp) Amendment Bill? Will it be introduced before Christmas? I look forward to the debate.
It must be embarrassing that investors ready to build biofuel plants making fuel from wastes and low value by-products are putting plans on hold because the Biofuel Act may be repealed.
It must be embarrassing that the EcoSecurities Group, one of the world’s largest, most reputable carbon trading companies has cancelled its plans to set up in NZ because there is uncertainty over whether the ETS will proceed.
It must be embarrassing for Gerry Brownlee to learn that the so-called ban on incandescent lights, which he campaigned to get rid of, is actually an efficiency standard for lighting just as we have for dozens of home appliances; that the appliance efficiency programme has saved households $148 million on their power bills over 7 years; and that some incandescents, as well as halogens and compact fluorescents will all meet the standard. It must be worse to find that without that standard, many of the best quality lights will not come into NZ because our market is too small if most people are still buying crap. Woops, market doesn’t always work after all.
He will learn similar embarrassing facts about what the showerhead issue was actually all about when he is responsible for cancelling a hot water efficiency standard for new homes.
So the interesting question, which I intend to ask in the House at some stage, is how does National intend to meet its target of 50% by 2050 with no investment in home insulation; no regulations for energy efficiency; no waste-to-biofuel projects; presumably no economy standards for vehicles coming into the country (announced in the Energy Efficiency and Conservation Strategy but not yet legislated); transport investment hugely favouring roads over public transport; and an investment strike in new green technology because of the uncertainty over whether there will be an adequate price on carbon?
Sounds like an interesting term ahead.