Richard Prebble: Climate Change Response Amendment Bill contains sneaky new tax


While we are focused on another lockdown the Government is sneaking in a great, big, new tax.

I would have missed it except I was watching the parliamentary channel. I saw the Green co-leader James Shaw under urgency introduce the Climate Change Response (Auction Price) Amendment Bill. “It is a technical” amendment he said.

It turns the emissions trading scheme (ETS) into a revenue-raising tax.

“Cap and trade” schemes are designed to create a market for the right to emit greenhouse gases and to give credit for carbon removal. Now it will be a tool to levy a tax.

The price to emit will not be the market price but whatever the Government says, in effect, a tax.

Shaw said this year the prices will be no less than $20 a tonne and maybe as high as $50 a tonne. Last year the international price was around US$10 ($13.84). The minister claims the Government had to lift the price because the “New Zealand ETS had failed to deliver on its primary purpose, namely to bring down emissions”.

New Zealand’s emissions have not fallen because, as the minister has admitted, New Zealand “had a cap-and-trade scheme without a cap”.

It is putting a cap on emissions, not the price that will reduce New Zealand’s greenhouse gases.

In the future a low price for emissions would indicate we are moving to a carbon-free economy. As technology tends to fall in price and improve in efficiency carbon capture will become cheaper.

The Government taking the power to fix the price of carbon above the international market price means our exporters will be penalised.

It was said in Parliament that at $50 a tonne the treasury will earn $6 billion a year. At that rate the Government will take $210b by the time the country reaches net zero in 2050.

As a tax it is about as bad as it gets. The Climate Change Commission reported the ETS falls disproportionately on the poor who cannot afford carbon-free technology such as electric cars.

Governments are addicted to tax. Government expenditure rises to exceed revenue. Once a new tax is imposed, no matter how damaging, governments find it very hard to remove the tax.

The coalition had already rigged the emissions market. Now it is a tax-gathering rort.

It is the whole planet’s emissions that must come down. A reduction in emissions in the Solomon Islands is just as valuable as a reduction in this country.

While there are emissions schemes that are scams there are, around the world, many high-quality schemes.

I know the Solomon Islands well. It is one of the 10 poorest countries. One of their few resources is tropical rainforests. As National Geographic reports: “The Solomon Islands is being stripped bare by foreign logging companies”. Experts agree that unless the world finds a way to preserve and expand the tropical rainforests global warming will be very hard to prevent.

We should be assisting the Solomon Islands to have a high-quality emissions scheme. New Zealanders in return for carbon credits should be paying poor villagers to maintain and expand their tropical rainforests. Instead our Government bans the purchase of overseas credits.

Why should the cost of saving the world fall on to a poor Solomon Islands villager with no other income except his trees?

It is bad science. New Zealand produces milk with the lowest emissions of any farms in the world. Fonterra has an ambitious programme to switch dairy factories to low-emission fuel.

Our artificially high price of carbon credits is resulting in high-quality farmland being converted to forests.

The parliamentary debate was so depressing. David Parker said “When you auction a house you have a reserve”. The Government is not selling a house. The Government is setting a monopoly price that every one of us indirectly will pay.

The National Party voted for the bill. National’s spokesman Stuart Smith asked “is this the right mechanism? We simply don’t know”. I had never heard of him. Smith has been the MP for Kaikōura since 2014, long enough to have learned never to vote in favour of what he does not understand.

Only the new Act MP Simon Court said the minister was rigging the market. He alone said New Zealanders should be able to buy high-quality emission credits from anywhere in the world.

Nationalism cannot prevent global warming.

Nothing we do by ourselves will save the planet. This is not a reason to do nothing. The world will penalise the freeloaders. We have to do our share, adopt good science and demand others do the same.

If the world follows our Government’s nationalistic approach and uses climate change to sneak in new taxes, then the outlook for the planet is grim.

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