New Zealand Herald economics editor Brian Fallow on the emissions trading scheme.
An excerpt: (read in full here)
“In the scathing judgment of Victoria University’s policy studies and climate change research institute it is fiscally unsustainable, environmentally counter-productive, administratively cumbersome and economically indefensible.
“Climate Change Minister Nick Smith rejects the charge of fiscal unsustainability (and no doubt the rest of the institute’s verdict as well).
“He objects to the presumption that if emitters have to pay less, then taxpayers will have to pay more. It is not true, he contends, that there is taxpayer “subsidy” to trade-exposed emitters.
“But his reasoning amounts to this: under Labour’s version of the ETS the Government would (eventually) make out like bandits, raking in far more from domestic energy consumers than it would be paying out in free emissions units to the energy-intensive, trade-exposed sectors.
“Under the modified scheme the Crown will still make money (at least after the next three years, when we have what amounts to a low-level carbon tax) but not as much.
“In other words it is as consumers rather than as taxpayers that the rest of us are picking up the bill for trade-exposed emitters’ emissions. The Government acts as an intermediary for that wealth transfer, but it will clip the ticket less under the new scheme that under the existing one.”