Monday, May 05, 2008

Climate change: The cost of failure

The government released its financial statements today, and while the headlines will be about the size of the surplus and the prospect for tax cuts in the budget, there's a far more interesting result buried in there: the cost of our Kyoto liability has now finally topped a billion dollars. The immediate cause is exchange-rate fluctuations (with the US dollar falling through the floor, we price in Euro now), but underlying it is a relentless rise in carbon prices, which Treasury is now estimating to be 2.5 times higher than they were just three years ago. And the scary thing is that this is almost certainly an underestimate; as Frogblog reported last month, actual prices on the European market are around twice that. If Treasury's mythical €11.13 credits exist, they should start buying them already.

As for who is responsible, it is the fault of both National and Labour. Successive governments have repeatedly lowered the bar on climate change, while having no policy to reduce emissions (a policy they seem to be repeating). Now its time to pay the bill, and our short-sighted politicians stand condemned by their inaction.