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Climate Change Policies Move NZ To Command Economy

Government's Climate Change Policies Move New Zealand To A Command Economy

Tuesday 30 Apr 2002

"The Government's determination to ratify the Kyoto Protocol ahead of the USA, Japan, Australia and Canada and other trading partners is bad in itself but their announced policy mix will be disastrous for the New Zealand economy," says ACT New Zealand Deputy Leader Ken Shirley.

"The charge on carbon fuels of $25 per tonne will severely impact on all transport costs but in particular the competitiveness of our primary industries. The majority of new electricity generation is based on carbon fuels, so energy costs are set to increase, which will impact across the whole economy, reducing our international competitiveness.

"Government's intention to pick winners through incentives and negotiate greenhouse agreements will mean that progressively all sectors need to go cap in hand to Government and will be beholden upon Government for their business success or otherwise. This is not a market response but is a central command economy response.

"The agricultural sector is being held to ransom with the requirement to invest in partnership with the Government in research to identify options for reducing agricultural emissions. Government holds the sword of Damocles with the threat to impose a research levy if research efforts fall below the requirement.

"Perhaps the most pernicious aspect of this announcement is Government's intention to appropriate the carbon sink credits. The forestry sector in particular should be outraged by this confiscation of a property right. If the Government owns the carbon stored in wood then surely Government must own the carbon contained in fossil fuels. Maori also should rightly be outraged by this assumption of property ownership as the Crown has in recent decades sold commercial forests to Maori as part of the Treaty settlement process. Government is now stripping much of the value away from those forests by confiscating an inherent part of the property right.

"By signalling the confiscation of this property right forestry valuations will be adversely affected immediately and international investors will look elsewhere.

"These policies will make a mockery of Government's regional development programmes as inevitably the regions will carry most of the burden associated with these new costs.

"The Kyoto Protocol is fundamentally flawed and while increasingly other nations are expressing reservation, the Labour/Alliance Government is charging down the wrong path with missionary fervour," concluded Ken Shirley.


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