Tuesday, September 15, 2009



Climate change: Shafted

Do you feel shafted by the government's proposed ETS changes? You should. At a time when the government has no money, when it is cutting back on "nonessentials" like health and education and sacking public servants to reduce wage costs, it will be giving $430 million a year in direct subsidies to polluters. That's real money - its the cost of the entire court system [PDF] - which could be used for other things (like, oh, ensuring the health system can keep up with demand, or paying doctors and teachers properly, or building Auckland a proper commuter rail network, or fixing our decrepit schools). And it comes straight out of our pockets, and goes straight into the pockets of those polluters' (mostly foreign) shareholders. In other words, wealth transfer from the poor to the rich - the entire reason d'etre of the National Party.

But it gets worse. The changes will make the ETS far less effective at reducing emissions, as polluters will not face the full marginal cost of their activities, while also significantly reducing the incentives for tree planting, our biggest and cheapest way to balance our carbon budget. The price cap will limit returns, while the 50% subsidy will halve the size of the market, lowering prices even further. The upshot is poor incentives for planting and retaining trees. And yet according to its Q&A [PDF], the government is assuming 50,000 Hectares of new planting a year. With this policy framework, I'm not sure where that is going to come from - but maybe Nick Smith knows some magic pixies who will solve the problem for us.

(Interestingly, the forestry changes mean the Maori Party has just shafted its own constituents, who have large forestry assets they now will not be able to get a return from. But I'm sure the government will give them a flag or something. Or maybe some shiny beads and a ministerial limo...)

Finally, agriculture. Not only does the free ride continue for another two years - they get ongoing production-based subsidies after that, amounting to half a billion to a billion dollars a year, every year, depending on the exact level of subsidy (and you can expect national to be more generous rather than less; these are after all its own constituents). Again, that money comes straight out of our pockets, and goes straight into those of some of New Zealand's richest citizens. And the more they pollute - the more their cows burp and piss and shit and foul our atmosphere and waterways - the more they get from us. If you don't feel ripped off by now, you bloody well should.