Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

ETS Changes to Cost $1.3 Bn – and an Eternal Transitition

ETS Changes to Cost At Least $1.3 Billion – and an Eternal Transition

Media Statement – 12 July 2012

The total cost to taxpayers of changes to the ETS is at least $1.3 billion, based on the $25 per tonne carbon price the government currently uses to assess policy options.

And the removal of dates for an end to so called ‘transitional provisions’ means there is now an Eternal Transition until a government is willing to make the case for imposing meaningful charges.

80% of the total additional cost of the changes arises from what the government describes as the “big ticket item”. This is the extension of the concession that allows polluters to pay just one emission unit for every two tonnes of carbon they release. This change is estimated to cost $80 million a year - and it alone represents a considerable break with the pre-election promise that “our changes to the ETS will be fiscally neutral”.

The government puts the total cost of the package of changes at $328 million. While this is based on the carbon price it regularly uses in its accounts – the current market price – at present that is a very low $6/tonne. When undertaking analysis to assess future liabilities arsing from climate policy, the government uses projections of future market prices. It has until recently used $50/tonne for this but has lately reduced this to $25/tonne. A future price is a better measure of the value at stake and at $25/tonne, the changes will cost taxpayers $1.3 billion in lost revenue.

Yet these estimates are only for the period until June 2016. A further review of the ETS has been signalled for 2015, but the Cabinet paper outlining the changes makes clear that no date will be set in legislation to end the extended holiday for polluters.

So if the transitional measures are not abandoned by June 2016, the taxpayer will continue to sacrifice revenue for every additional year. And as the ETS makes polluters pay for a greater proportion of their emissions over time, the annual loss will rise each year.

The potential cost to taxpayers of the change in legislation is therefore much greater than the $1.3 billion for the first three and a half years covered in the Cabinet paper. As there is no certainty when the Eternal Transition will be abandoned, the full potential loss is the revenue forgone for many years ahead. And as carbon prices are expected to rise over time, this would further push up the losses.

The practical effect of setting no dates to end the holiday is that the ETS becomes the Eternal Transition Scheme. It changes from something that provides a limited holiday period for polluters, to something that presents no real incentive for change until a government has the courage to make the case for meaningful emission charges.

The government has given up holding the threat that the scheme will bite at some defined date and is resting with a regime that does not even have gums.

ENDS


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Clark Exit, Convention Centres, And The Killing Of Hachalu Hundessa


Goodbye, David Clark. In the end, the outgoing Health Minister decided that in the midst of a pandemic the best thing he could do for New Zealand would be to no longer be there – given that being there had involved hiving off on his mountain bike during a lockdown, and throwing the country’s most beloved Health bureaucrat under a bus. As Clark indicated so memorably at last week’s press conference, when it comes to managing public health risks at the border the buck stops with…that guy over there! In the aftermath of that debacle, Clark reached the same conclusion the nation had reached some time ago, that leadership just wasn’t his thing. Once again, he got on his bike.... More>>
 

Government: David Clark Resigns As Health Minister

The Prime Minister Jacinda Ardern has accepted David Clark’s resignation as Health Minister. More>>

ALSO:

Election 2020: Green Party Unveils Income Policy

The Green Party is today unveiling its Poverty Action Plan, which includes a Guaranteed Minimum Income to ensure people have enough to live with dignity. The scheme resets income support payments to ensure everyone not in full-time paid work gets at least ... More>>

ALSO:


Conservation: New Protection For Dolphins

Extensive new protections are being put in place as part of an updated plan to look after New Zealand’s native Hector’s and Māui dolphins, announced Minister of Fisheries Stuart Nash and Minister of Conservation Eugenie Sage today. More>>

ALSO:

Auckland: Water Consent Referred To Board Of Inquiry

Environment Minister David Parker has today “called in” Auckland’s application to the Waikato Regional Council to take an extra 200 million litres of water a day from the lower reaches of the Waikato River for Auckland drinking water and other municipal uses... More>>

ALSO:

Gun Law: A New Firearms System Focused On Safety

Tougher gun laws will begin to take effect from next week following the passage of new firearms legislation through Parliament today. The Minister of Police says the Third Reading of the Arms Legislation Bill is an historic milestone for community ... More>>

ALSO:

Government: Building A Stronger Health And Disability System

The Government is committing to a long-term programme of reform to build a stronger New Zealand Health and Disability System that delivers for all. More>>

ALSO:

National: Todd Muller Announces Caucus Reshuffle

Today I am confirming a minor shadow cabinet reshuffle due to the retirement of Paula Bennett. Dr Shane Reti will be ranked number 13 and will take on Associate Drug Reform. Shane has demonstrated a huge intellect and capacity for work, supporting ... More>>

Biosecurity: Winston Peters On EU Travel: 'We're Not Going To Compromise Our Country's Health'

Foreign Minister Winston Peters says New Zealanders who head to Europe on holiday should pay for their two weeks' hotel quarantine when they return. More>>

Economy: Infrastructure Investment To Create Jobs, Kick-Start COVID Rebuild

A new package of infrastructure investments will help kick-start the post-COVID rebuild by creating more than 20,000 jobs and unlocking more than $5 billion of projects up and down New Zealand. Finance Minister Grant Robertson and Infrastructure Minister ... More>>

ALSO:

Covid-19: Isolation System To Be Beefed Up After Stress

A range of improvements are already underway to address issues identified in the rapid review of the Managed Isolation and Quarantine system released today, Housing Minister Megan Woods said. The review was commissioned just over a week ago to identify ... More>>

ALSO:

Election 2020: Parties Get Into Gear

ACT has today announced its list for the 2020 General Election. “The calibre and experience of our candidates will impress voters of every persuasion. We have candidates from all walks of life. People who have built their homes, families and businesses ... More>>

ALSO:


Int'l Trade: New Zealand To Host Virtual APEC In 2021

Foreign Affairs Minister Winston Peters and Trade and Export Growth Minister David Parker announced today that New Zealand’s hosting of APEC in 2021 will go ahead using virtual digital platforms. Mr Peters said the global disruption caused by COVID-19, ... More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 


 

InfoPages News Channels