Over the past year, the New Zealand government has been working on a new climate change policy. While I think the policy is fairly comprehensive, and in some ways even an improvement on the old, it does have a hole: direct industrial emissions. And that hole is likely to become bigger with Holcim's plans to put a $200 million cement plant near Oamaru.
Making cement necessarily means producing carbon dioxide, and according to the Greens, the new plant would produce up to 800,000 tonnes of CO2 a year. The expected cost of those emissions (at Treasury's current estimate of NZ$14.77 / tonne) is $11.8 million - 6% of the plant's value - a year. And it could easily be twice that if carbon prices rise (as they are expected to). Because the current policy does not cover direct industrial emissions, that cost will be picked up by the taxpayer. So we will effectively be subsidising Holcim's foreign shareholders $12 million a year to pollute.
I take it as axiomatic that the New Zealand government should not be paying these sorts of environmental subsidies. Holcim should be paying for its own emissions, rather than being able to dump the cost on (and therefore boost their profits at the expense of) the New Zealand taxpayer. This hole in policy needs to be closed, and soon.