Wednesday, May 18, 2022

Richard Prebble: The Emissions Trading Scheme is now a slush fund

They have corrupted a crusade to save the planet into sleazy pork barrel politics. Labour and the Greens new climate change policies are just vote buying.

The climate change policies announced this week will not bring New Zealand one day closer to net zero emissions but will fund, to name one policy, changes to school curriculum and NCEA so we “embed an understanding of the collective nature of our wellbeing.” Our schools will be teaching socialist dogma.

It just proves we cannot trust politicians with our money; they will spend it on buying votes.

Labour with the Greens has taken the $3 billion in the Emissions Trading Scheme (ETS) to pay for:

• Creating an accessible, responsive and flexible tertiary education and training system

• Developing an income insurance scheme and improved welfare system income adequacy

• Implementing the Tackling Safe Speeds programme to ensure safer speeds around schools

• Improving digital connectivity for rural communities

• Supporting Tikanga-based programmes to support needs and aspirations of whenua Māori entities

• The Essential Freshwater programme

Act MP Simon Court, who produced this list, points out that not one of these initiatives has anything to do with climate change.

Even those schemes that will reduce emissions will not alter the country’s path to net zero emissions. The path is already in place. The ETS requires all carbon producers to buy credits equal to their emissions. The total amount of emissions is capped and will decline to net zero by 2050.

The policies announced this week will not alter this path. Under the ETS scheme every unit saved from say switching to an electric vehicle frees up a unit for some other activity such as driving an eight-cylinder gas guzzler.

All these new policies will do is enrich some at the expense of others. Many, such as corporations, who will be feeding at the pork barrel, can finance their own route to zero emissions.

While emitters such as oil companies buy the ETS units, the real purchasers are motorists. Ordinary New Zealanders have paid the $3 billion in the ETS fund through their daily purchases.

The ETS money should be returned to households. As Act has advocated the fund could provide one thousand dollars for a household of four.

In addition to returning the ETS fund to its real owners there are policies the government should implement that would improve our climate change policies. They are policies that would make a real difference.

Climate change is a global issue. No one country can save the planet. Labour, National, Greens and the Maori Party have adopted a “climate change in one country” policy. Scientific madness. It pretends only New Zealand ETS units created in this country reduce global emissions.

A carbon credit from New Zealand forests has the same effect on the planet as a credit created from a tropical forest in the Solomon Islands.

It matters. While New Zealand is the world’s most efficient producer of milk we will never be the most efficient at growing forests to absorb carbon. An equivalent tropical forest absorbs four times more carbon.

New Zealand should be assisting poor countries like the Solomon Islands to regrow their tropical forests and earn ETS credits. Instead international investment funds are buying up productive New Zealand farms and turning them into inefficient carbon sinks.

Climate change in one country means the spot price of New Zealand carbon credits is $76.50. The world price is just US$20.81

Having carbon credits more than twice the world price means Labour and the Greens cannot place agriculture, which is a major emitter, under the ETS scheme. It would make our exports uncompetitive.

To efficiently combat climate change Labour and the Greens should allow emitters to buy verified ETS units on the world market. Then the government could include agriculture in the scheme.

Market price signals - not politicians - should decide the best way to allocate the carbon credits.

No marketplace would ever fund a “cash for clunkers” scheme. Everywhere it has been tried the scheme has proved a very expensive rort. When my daughter was training to be a teacher and needed a car to get to her rural school on section, I bought her an old clunker. Under this scheme she could trade that old clunker, get the $10 thousand subsidy, plus help from me, and buy a new car. I could drive the new car and let her drive my old car. She no longer has that car but you can see how easy the scheme is to rort.

Similar criticisms can be made of every one of the announced initiatives.

It is old fashioned centralized planning. Saving the planet is no reason to bring back failed socialist central planning. Combating climate change is so vital it is essential we use the most powerful and successful economic tool, the free market.

Richard Prebble CBE is a former member of the New Zealand Parliament. Initially a member of the Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996, becoming its leader from 1996 to 2004.  This article was first published HERE.

1 comment:

Terry Morrissey said...

Why not just admit, Richard, that the whole climate change fairy tale is nothing more than a rort that is now coming back into fashion since the public are finally coming to realise that the covid train is running out of steam. No matter how high an opinion politicians and shonky scientists have of themselves, there is no way that they can influence climate. All they can do is continue to spread fear and steal money from gullible taxpayers.