Climate Change Commission insistent on making emissions reduction expensive

Reacting to today’s release of the Climate Change Commission’s advice on the New Zealand Emissions Trading Scheme (ETS), Taxpayers’ Union climate policy spokesperson, Connor Molloy, said:

“The advice, if accepted, would continue to keep carbon prices arbitrarily high, pushing up prices for consumers and making it more expensive to reduce net emissions for absolutely no additional environmental benefit.

“The Commission emphasises that social and economic equity must be considered as we respond to climate change while continuing to advocate for an arbitrarily high minimum price for carbon credits that does not even reduce emissions. This and the lack of any real attempt to legalise cheap international offsets makes life harder for the most economically marginalised.

“The Climate Change Commission also has it back to front when it comes to how we decarbonise. They argue that if other policies outside of the ETS reduce gross emissions, the ETS cap can be lowered to lock this in as a net emissions reduction. The Government could simply lower the ETS cap instead and the net emissions reduction will occur where it is most affordable to do so.

“Both scenarios reduce net emissions but, for some unknown reason, the Commission seems obsessed with doing things as expensively as possible through picking winners rather than allowing an efficient market.

“Today’s advice should also act as a warning for the Government. Relying on ETS revenue is not a sustainable way to deliver lasting tax relief when the revenue is so variable. The Government should instead focus on cutting waste to fund its tax relief and use ETS revenue to provide a universal carbon dividend to all taxpayers which may vary year to year.”