National's tax cut policies relied on stealing revenue from the ETS (previously used to fund emissions reduction) to fund tax cuts to landlords. So how's that going?
Badly. Today's auction failed again, with zero units (of a possible 7.6 million) sold. Which means they have a $456 million hole in their budget. Better, its now looking even likelier that the next auction will fail as well - meaning the entire pile (which will have grown to 11.1 million tons, plus the 7.7 million ton cost containment reserve) will be cancelled at the end of the year. Meaning nearly 19 million tons which won't be able to be emitted.
Polluters will still pollute this year, thanks to government pollution subsidies and stockpiled and forest credit bought on the spot market. But the ETS settings have been changed to aggressively reduce the stockpile, and eventually it should run out. If National cut subsidies - which are a cost to government - rather than continuing to support dirty, outdated and inefficient polluters, then maybe, eventually, they'd be forced to clean up their act. If they don't, then we know whose side they're on.
