Taxpayer subsidies for polluting industries | The Jackal

12 Jul 2012

Taxpayer subsidies for polluting industries

Today, the NZ Herald reported:

Moves to water down the emissions trading scheme which the Government announced last week will cost the taxpayer $328 million over the next four years.

Just over 80 per cent of the impact, or $265 million, arises from the decision to extend indefinitely the "transitional" buy one, get one free provision of the scheme, under which oil companies, power companies and industrial emitters with obligations under the scheme need to surrender only one unit to the Government for every 2 tonnes of emissions they are liable for.

Under the present law that was to have expired at the end of this year.


Climate Change Minister Tim Groser objects to describing a decision not to increase a charge or a tax as a "fiscal cost".

"If I said 'Let's do a tax increase to raise $1 billion' and the Finance Minister said 'I don't think households and companies can afford $1 billion' could I then say, "But minister, there's a fiscal cost of $1 billion to your not agreeing to my proposal'?" Groser said. "We never saw this as a revenue-earning mechanism."

Tim Groser is talking rubbish! Firstly it costs us internationally because the government has to purchase additional carbon credits to offset those gifted to polluting industries, secondly polluting industries continue to post huge profits so there is no question that they can afford to pay for the environmental damage they cause and thirdly there's a fiscal cost for the government and more importantly taxpayers, which we cannot afford.

But perhaps the worst symptom of Nationals changes to the ETS is that there's even less incentive for polluting industries to reduce their carbon emissions. You would have hoped that the recent unprecedented and severe weather events happening around the world as a result of climate change would have served as a wake up call.

I guess part of the problem is that there's a lot of misinformation and underreporting... For instance the calculations in the NZ Herald article use an incorrect carbon price of around $8 per tonne, when in fact it's currently closer to $25. Therefore the actual cost to the taxpayer to subsidize polluting industries over the next four years is approximately $1025 million... Trust the Herald to downplay the issue.

Climate Change Denier Tim Groser