Friday, June 23, 2006

Running out of time

According to this morning's Dominion-Post, the government is set to announce its replacement for the carbon tax next month, with a final decision to be taken in May next year after a round of public consultation. This seems to be running several months behind schedule; the working group convened in response to the government's climate change review was supposed to report back in early April. It is also coming perilously close to running out of time entirely. Kyoto's first commitment period begins on January 1st, 2008, and if there's any more delays - if legislation needs to be passed, for example, or if Peter Dunne throws his toys out of the cot - then we will run the risk of entering it with no firm policies in place to reduce emissions. And the consequence of that will be even greater exposure to a volatile international carbon market, where prices are already far higher than Treasury expectations.

As for the policy itself, it sounds as if they'll be going for a narrow carbon charge on electricity generators. It's better than nothing, but as I've said before, far too narrowly targetted to produce the emission reductions we need. It could still broadly work if the government adopts other mechanisms to target the transport and farming sector, such as those proposed in the Greens' Turn Down the Heat document - but they really have left it far too late for these policies to have a significant effect before the end (let alone the beginning) of CP1.

If I sound frustrated, it's because I am. We've had not one, but two comprehensive climate change policies which would have stuck a price on carbon and subsequently lowered our emissions - and they've both been ditched because the government got cold feet. In 1999, the then-National government proposed a carbon tax as an intermediate step before the introduction of emissions trading. The policy would have been implemented by 2002, allowing plenty of time for the effects to feed and lower our emissions in CP1, but the incoming Labour government got cold feet and started again from scratch. Their replacement - a carbon tax by 2007 with the option of shifting to emissions trading at a later date - covered the same ground, but was dumped last year after more chills were felt in the toes. And I half expect that the same will happen even to the wishy-washy half-measures currently on offer: industry lobbies will squeal, farmers will snarl, and the government will obediently back down and scrap the whole thing. And we will end up paying for it.


If it wants Dunne's support all the government needs to do is say that its carbon tax is a tax, and therefore a revenue matter and Dunne - the Minister of Revenue - will be bound by collective responsibility.

Posted by Graeme Edgeler : 6/23/2006 12:17:00 PM

Firstly, his party won't be. And secondly, Dunne is now on record as saying that any attempt to revive the carbon tax will be taken as a breach of United Future's confidence and supply agreement (which had only called for a review). It's not unfeasible that he'll pull the same stunt on any measure to combat climate change.

Posted by Idiot/Savant : 6/23/2006 12:49:00 PM

Not to worry, Labour's building more motorways in Auckland. That'll save the day. Tra la la.

sigh: What Labour needs to do is put foward good sensible policy here, backed by Jim and the Greens (and Maori?), and get it voted down by the heads in the sand brigade. Give them some ground to stand on come election time, and some chance of a real left-wing government next time.
If the UFies go for an snap election, all the better. Such tactics would kill them good and dead.

Posted by tussock : 6/25/2006 04:05:00 PM