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Dropping carbon tax puts pressure on other policy

Dropping carbon tax puts pressure on other policies

The Government’s decision to drop the carbon tax will put intense pressure on other policy measures to deliver emission reductions, says Victoria University economist Ralph Chapman.

“The dropping of the carbon tax is disappointing,” said Associate Professor Chapman of the School of Earth Sciences.

“A tax shift from income to pollution would have been desirable. It has been an efficient and successful policy in a number of other countries, such as The Netherlands, allowing a reduction in income taxes. The risk now is that we may end up without a cost-effective strategy to reduce emissions across the economy.

“Action to reduce greenhouse gas emissions is becoming increasingly urgent, and without a carbon tax other measures – such as support for renewable energy and energy conservation – will have to be pushed much harder. New Zealand cannot afford to sit back and let other more progressive countries move ahead while we do very little. We have to contribute to the global push to take effective action to minimise climate change.”

New Zealand is committed under the Kyoto Protocol to stabilising greenhouse gas emissions by 2012, either by cutting emissions or by buying carbon credits on the international market.

“We don’t want to see New Zealand being in a position, in a few years’ time, of having to buy expensive credits on the international market, when we could have implemented less costly policies at home.”

Associate Professor Chapman was also critical of officials’ advice to rely heavily on buying emission reductions abroad.

Dr Chapman added that an upcoming conference in March 2006 will underline just how urgent action to reduce greenhouse gas emissions is becoming. The Climate Change and Governance Conference: Critical Issues for New Zealand & the Pacific will be held at the Museum of New Zealand Te Papa Tongarewa on 28 and 29 March 2006 and is being organised by the University’s Institute of Policy Studies, in the School of Government, and the School of Earth Sciences. Professor Jonathan Boston, Chair of the Organising Committee and Deputy Director of the Institute, says the conference is expected to draw leading international figures in the climate change debate.

“Climate change represents one of the greatest challenges for the world community. This conference will explore the nature and likely impacts of climate change and the options for accelerated action by governments.”

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