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No Right Turn: National's $1.25 billion giveaway

No Right Turn: National's $1.25 billion giveaway

How would you feel if the government deducted $300 from your bank account to give to its mates? Because that's what National is planning to do with carbon credits. At a meeting in Christchurch yesterday, National Party leader John Key announced that a National government would deliver a carbon windfall to forest owners by hand out carbon credits for all forests planted since 1990. It's an idea which makes absolutely no sense from a policy perspective - the trees are already there, and so there is nothing to incentivise, and nothing to be gained. But its an idea that makes a lot of sense if you view climate change policy primarily as a way of delivering corporate welfare to business interests, as yet another way to funnel public money and assets into the private pockets of your rich mates.

Make no mistake - this is a massive asset grab. Forest sinks are expected to absorb 78.2 MTCO2-e over CP1. At the present value of $15.92 / ton, those credits are worth $1.25 billion - and that value is expected to rise. And National is planning to hand this over to its friends and donors in the biggest theft of public property since they hocked off the family silver at bargain basement rates in the 90's. I'd ask how much the forest owners donated to the party to receive this outcome - except it would probably be considered contempt of Parliament.

The argument that these credits "naturally" belong to forest owners is spurious. They are an accounting convention created by the Kyoto Protocol, and would not exist had our government not pushed for a net approach, and other governments reluctantly agreed to accept it. Under the Protocol, credits and liabilities are the responsibility of governments. They can pursue whatever policies they wish to reduce their emissions, including carbon devolution and trading, but at the end of the day they carry the can for all emissions in the eyes of the international community, and they end up having to purchase credits on the international market to make up any shortfall. Forest owners are not parties to the Protocol, and have no emissions limits or obligations under it - and therefore no credits.

If National becomes the government and implements its mad plan, we will pay for it. Ordinary taxpayers will have to fork out to purchase credits on the international market to replace those given away. That's money that could go on schools, hospitals, roads, or (if you're that way inclined) tax cuts. Instead it will be going directly into the pockets of forest owners. Coincidentally, this will massively increase the cost of compliance with the Protocol - but I'm sure National (who until last year were rabidly opposed to meeting our Kyoto obligations) wouldn't use that as an excuse to back out of any post-2012 agreement, would they?

In short, its a typical National Party policy: socialise the costs, privatise the benefits, and funnel money from the poor to the rich. We let them get away with this once in the 90's; we shouldn't let them do it to us again.


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