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Why are we paying climate polluters $31m to pollute?

24 May 2015

Why are we paying climate polluters $31m to pollute?

Figures in National’s 2015 Budget revealing that nearly $31 million is being spent on increasing greenhouse emissions show just how much the emissions trading scheme (ETS) is unfair to New Zealanders who are trying to do their bit to prevent climate change, the Green Party said.

“All New Zealanders are essentially giving climate polluters almost $31 million via the tax system, whether they like it or not,” Green Party Co-leader Russel Norman said.

“The Budget has revealed that the Government handed out almost $114 million worth of free carbon credits to industries that cause climate change in the 2014/15 year but received only $83 million through the ETS. Taxpayers picked up the $31 million difference.

“National’s ETS failure means that even if someone is trying to reduce their own carbon footprint, their taxes are subsidising growing New Zealand’s overall greenhouse gas emissions. That’s hugely unfair.”

Under the ETS, many companies that emit greenhouse gases which cause climate change must purchase carbon credits to offset those emissions. Some industries receive an allocation of free credits and some polluters such as the dairy sector have no obligations to buy credits at all – taxpayers cover the cost of their emissions.

“The ETS is a farce. It doesn’t incentivise industry to reduce its greenhouse gas emissions, like it’s supposed to.

“New Zealand’s emissions have grown by 20 percent since 2008 and are projected to grow by 48 percent in a decade.

“The Government’s own official information is that the ETS has had almost no impact on emissions. All it’s done is shift money from taxpayers to the biggest polluters.

“Incredibly, if New Zealand’s emissions continue to rise in the years ahead, the Treasury estimates that taxpayers will face up to $52 billion in costs.

“It’s time to scrap the ETS and introduce a simple system like a carbon tax on polluting businesses, and use the revenue from the carbon tax to cut the personal and company tax rates. This would make households and most businesses better off because they wouldn’t be subsidising dirty industries anymore.

“A carbon tax is a simple and transparent way for the companies and industries that are causing climate change to pay for it, instead of the complicated, expensive, and ineffective ETS,” Dr Norman said.

ETS Revenue and Expenditure Source: Budget 2015
YearRevenue (millions)Expenditure (millions)Difference (millions)

2012/13
40,474,00054,823,000
-14,349,000

2013/14
13,410,00046,223,000
-32,813,000

2014/15

83,031,000

113,717,000

-30,686,000
2015/16 (projected)
143,650,000

159,800,000

-16,150,000

ends

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