Govt once again is all talk, little action

Stuff reports:

Cabinet has rejected a move that would have raised petrol and electricity costs.

But now big polluters can keep gaming the carbon system and banking cheap credits – potentially putting New Zealand’s climate goals in jeopardy. 

Under the Emissions Trading Scheme, big carbon emitters have to pay for every tonne of emissions – one of the Government’s major tools for doing its bit on global heating.

Cabinet papers show the Government has gone against the advice of both the independent Climate Change Commission and Climate Change Minister James Shaw.

Shaw recommended following the commission’s advice and letting the price of carbon rise – and stopping pumping extra credits into the market so frequently. That would have given big polluters more incentive to rein in planet-heating emissions, as heat waves, floods and droughts keep worsening.

Instead, Cabinet has chosen to allow only small, inflation-linked price rises.

This is bad economics and bad environmentalism.

The price of emissions unit should be set by the market, not by politicians. If you allow the ETS to work properly, you don’t need all those daft expensive policies foisted on us by Cabinet. Yes an ETS price of $100 will be painful for some, but it is a whole lot better than policies that effectively cost $12,000 a tonne.

While this would have hit household bills, the commission also wanted the Government to protect those who can least afford their cost of living to increase. Shaw, in turn, told Cabinet he thought “unacceptable” impacts on the cost of living could be dealt with using other policies (like discounts and subsidies), rather than blunting the carbon price.

Some proceeds of carbon sales could have been funnelled into schemes like clean car discounts, replacing old boilers and a cash-for-old-dungers scheme or other household subsidies like electricity rebates. Some economists favour direct cash payments.

And again the Government is at fault. If the Government hadn’t spent all the ETS revenue on stupid ineffective policies, it could have given every family a climate dividend which would offset increased fuel and electricity costs.

The post Govt once again is all talk, little action first appeared on Kiwiblog.