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Govt's emissions trading scheme falls short
Climate and taxpayers pay for big business to pollute
September 20, 2007
Greenpeace New Zealand puts on a solar powered sausage sizzle outside of parliament (after being moved on from the steps of parliament) under the banner 'All sizzle no sausage' to highlight the difference between political talk on climate change and substantial actions and solutions on climate change NOT FOR ARCHIVE OR RESALE
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Firstly it's downright alarming that there's no corresponding emission
reduction target set for New Zealand's greenhouse gas emissions. This
means there's no guarantee that emissions will actually reduce - which
is surely the whole point of such a scheme. Trading permits to offset
emissions won't necessarily help avoid dangerous levels of climate
change; we actually need to REDUCE those emissions. The same applies to
the Labour-led Government's "carbon-neutrality" catchphrase - it
actually says nothing about emission levels, and can just mean buying
your way out of bad habits.
In order to avoid dangerous levels of climate change, the Government needs to achieve at least a 30% reduction in New Zealand's greenhouse gas emissions by 2020 and an 80-90% reduction by 2050 from 1990 levels. But this scheme won't even get us close. In fact, projected emissions reductions from the scheme fall far below those required under the Kyoto Protocol.
A second fundamental flaw of the scheme is the exclusion of the agriculture sector until 2013. For an emissions trading scheme to be effective and fair, all sectors and greenhouse gases should be included from the outset.
Yet the Government has announced that the agricultural sector - which is responsible for almost half of all New Zealand's greenhouse gas emissions - will be exempt from the scheme until 2013, and even then will receive the vast majority of its permits for free.
This in effect means that every New Zealand taxpayer will be forking out for the agriculture industry's emissions and the dairy sector will be subsidised at a time when they least need it. Mandatory targets for all sectors are essential if significant reductions are to be achieved.
Major problem number three - the permit allocation method. The scheme is heavily biased towards polluters because the Government has agreed to a permit allocation method which will see major polluters given FREE permits to pollute. By doing so, it's offering windfall profits to shareholders and letting the taxpayer and the planet bear the cost.
Free credits are the emissions trading equivalent of tax breaks. Every free credit that goes to industry is money in shareholders pockets while consumers not only subsidise the polluting sector through their taxes but also pay increased electricty prices. It is disappointing that the Government hasn't learned from the European Union, who found that free credits offered through phase one of their emissions trading scheme did not provide sufficient encouragement for firms to reduce their emissions.
Industries should not be subsidised with free permits to emit greenhouse gases; instead the Government should auction permits and use the money raised to assist vulnerable people and help New Zealanders to live more sustainably. Auctioned permits could pay for improved income support for people facing higher costs, cheaper and more efficient public transport, domestic energy efficiency, and home insulation.
The establishment of an emissions trading scheme is a step in the right direction, but the current scheme fails to go anywhere near far enough. As the scheme stands, the agricultural sector and big energy users are the winners and taxpayers and the climate pay the cost.
Some positives about the announcements:
In order to avoid dangerous levels of climate change, the Government needs to achieve at least a 30% reduction in New Zealand's greenhouse gas emissions by 2020 and an 80-90% reduction by 2050 from 1990 levels. But this scheme won't even get us close. In fact, projected emissions reductions from the scheme fall far below those required under the Kyoto Protocol.
A second fundamental flaw of the scheme is the exclusion of the agriculture sector until 2013. For an emissions trading scheme to be effective and fair, all sectors and greenhouse gases should be included from the outset.
Yet the Government has announced that the agricultural sector - which is responsible for almost half of all New Zealand's greenhouse gas emissions - will be exempt from the scheme until 2013, and even then will receive the vast majority of its permits for free.
This in effect means that every New Zealand taxpayer will be forking out for the agriculture industry's emissions and the dairy sector will be subsidised at a time when they least need it. Mandatory targets for all sectors are essential if significant reductions are to be achieved.
Major problem number three - the permit allocation method. The scheme is heavily biased towards polluters because the Government has agreed to a permit allocation method which will see major polluters given FREE permits to pollute. By doing so, it's offering windfall profits to shareholders and letting the taxpayer and the planet bear the cost.
Free credits are the emissions trading equivalent of tax breaks. Every free credit that goes to industry is money in shareholders pockets while consumers not only subsidise the polluting sector through their taxes but also pay increased electricty prices. It is disappointing that the Government hasn't learned from the European Union, who found that free credits offered through phase one of their emissions trading scheme did not provide sufficient encouragement for firms to reduce their emissions.
Industries should not be subsidised with free permits to emit greenhouse gases; instead the Government should auction permits and use the money raised to assist vulnerable people and help New Zealanders to live more sustainably. Auctioned permits could pay for improved income support for people facing higher costs, cheaper and more efficient public transport, domestic energy efficiency, and home insulation.
The establishment of an emissions trading scheme is a step in the right direction, but the current scheme fails to go anywhere near far enough. As the scheme stands, the agricultural sector and big energy users are the winners and taxpayers and the climate pay the cost.
Some positives about the announcements:
- A price on greenhouse gases is a crucial part of any climate package and an emissions trading scheme is a step in the right direction
- The Government has committed to generating 90% of New Zealand's electricity from renewables by 2025. This is a positive step, although it's a pity they didn't take this further and commit to 100% renewable electricity, which our Energy Revolution report reveals is achievable by 2025
- The electricity and transport sectors will receive no free allocations of emissions permits
- There are no mandatory emissions reduction targets. There is therefore no guarantee that New Zealand's emissions will actually reduce as a result of the scheme
- The Government admits that even with the emissions reductions scheme in place, we will overshoot our Kyoto cap by 25million tonnes
- The Government has set a number of goals for carbon neutrality (for example carbon neutrality for the transport sector by 2040), but carbon neutrality can be achieved simply by purchasing emissions offsets. Carbon neutrality does not prevent emissions from increasing
- Not all sectors are included in the scheme from the outset
- Agriculture will be subsidised by New Zealand taxpayers for the next six years. Their exclusion from the scheme until 2013 means that taxpayers will be paying for the agricultural sector's share of New Zealand's Kyoto liability. They will also be subsidising the sector through a number of new Government grants to agriculture
- Major polluters can expect windfall profits under the scheme from free pollution credits. Up to 90% of allocations to the energy sector (excluding electricity) and major industrials will be given away for free. When the agricultural sector is finally included in the scheme in 2013, they'll receive 90% of their emission allocations for free
- Coal exports are exempt as are fugitive emissions from coal mining (although fugitive geothermal emissions are covered by the scheme)
