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New multi-million dollar bill for taxpayers under failed ETS

4 August 2014

New multi-million dollar bill for taxpayers under failed ETS

New figures showing taxpayers forked out nearly $6 million in the last year on free pollution permits to Rio Tinto show the emissions trading scheme (ETS) must go, the Green Party said today.

According to the figures, the number of free New Zealand Units (NZUs) allocated to New Zealand Aluminium Smelters Ltd (part of Rio Tinto Alcan) under the ETS jumped from 300,000 in 2012 to over 1.5 million in 2013.

At today’s spot NZU price of $3.90, that amounts to $5.85 million worth of credits. Allocations to several other big polluters have also risen.

“The ETS is a failure and a fraud and it’s time taxpayers stopped footing the bill for it,” said Green Party climate change spokesperson Dr Kennedy Graham.

“The scheme needs to be put out of its misery so ordinary New Zealanders are no longer shouldering the cost of climate pollution.”

As part of its weakening of the ETS, the Government has spent hundreds of millions of dollars gifting free carbon units to big polluters.

Some of these polluters have then surrendered much cheaper international units to meet their emissions obligations under the ETS (a process known as “arbitrage”), thereby profiting at the expense of New Zealanders.

“These latest figures show the National Government is incapable of understanding the basic economic tenets of climate policy”, said Dr Graham.

“If, despite all the mounting evidence about the risks and costs of climate change, National continues to gift free carbon credits to polluting industries at the taxpayers’ expense, it is not only encouraging more pollution, it is also condemning our country to a catastrophic debt burden as the international carbon price rises.

“Climate Change Minister Tim Groser recently admitted that the ETS was designed to allow polluters to ‘maximise their fiscal position’ but ripping taxpayers’ off to the tune of millions is ridiculous.

“The ETS has failed. It was designed to incentivise emission reductions, investment in clean technology, and the planting of trees. It has done none of these things and it is costing ordinary New Zealanders.”

The Green Party announced last month it would scrap the ETS and introduce a fair and transparent carbon tax, the revenue from which will all be returned to households and businesses in the form of tax cuts.

“The Green Party is the only political party offering voters a win-win plan this election that will protect our climate, achieve carbon neutrality by 2050 and leave Kiwi families better off,” said Dr Graham.

For more on the ETS permit allocations: http://www.climatechange.govt.nz/emissions-trading-scheme/participating/industry/allocation/decisions/index.html

For the Green Party climate policy: http://www.greens.org.nz/climateplan

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