When the Emissions Trading Scheme was originally introduced, way back in 2008, it included a generous transitional subsidy scheme, which saw "trade exposed" polluters given free carbon credits while they supposedly stopped polluting. That scheme was made more generous and effectively permanent under the Key National government, and while Labour talked about removing the subsidies, they somehow never got round to it (it would have upset someone, you see). Both the Parliamentary Commissioner for the Environment and He Pou a Rangi have recommended reducing the scheme, and now Treasury and IRD have joined them. But National says "no":
Ministers rejected advice to take a hard look at hundreds of millions of dollars in climate grants to the likes of NZ Steel, Methanex, Rio Tinto, and Fletcher Building.So, a government which endlessly claims that we don't have enough money for schools or hospitals or public transport (or anything other than landlord tax cuts and pointless guns) is happy to continually fork out quarter of a billion dollars a year to encourage some of our worst polluters to keep polluting. You'd almost get the impression that they weren't really serious about either climate action or fiscal management...Inland Revenue and Treasury told the government there was no proper evidence that yearly subsidies to some of the country's biggest carbon polluters were needed.
Their recommendation for a thorough review was met with a no thanks from Minister Simon Watts.
He Pou a Rangi has been crystal clear that the current level of subsidies is a long-term threat to the effectiveness of the ETS, and they need to be reduced ASAP. So this is going on the - already long - list of immediate problems the next government will have to sort out. And hopefully, they'll have no time for industry special pleading while doing so. Because these polluters have already had nearly twenty years to clean up their act. If they haven't done it by now, then its time they faced the financial consequences for their stupidity.
