Emissions Trading Bill

Can someone, please, explain this to me in simple terms. I was talking to a Diary Farmer just now, who says this will cost him 200 grand a year, some of which will be picked up by Fonterra and the rest by us. He said to look forward to buying cheese made in China as it will be half the cost of ours.

Surely not?

Is this as crazy a move as I have been lead to believe?

Why are we leading this charge when it really will have no positive impact?

because the EU is doing it. we want to sell stuff to the EU. they don't want to buy stuff from places that don't do it.

oh and somehow it reduces pollution magically too.

The ETB is a total and utter crock.

The only benefit which can come of it is the possible PR value NZ gains overseas for looking like we're doing the right thing/being leaders. In reality no-one will care and it will only add an extra cost to things we need.

R

Good post.

DC, this frustrates me SO MUCH.

The ETS doesn't load any cost on the nation - the fact that we signed up to Kyoto does. The ETS is redistributing that potential liability onto the people that are creating it; i.e. rather than the general taxpayer having to front up a few billion dollars for our Kyoto bill in 4years, we're putting that potential liability on the industries that are causing the bill - and therefore directly incentivising it to be lower.

RobW, your attack on the ETS is absurd - if you want to relitigate the Kyoto decision then fine, but WE SIGNED IT (like every developed nation bar the US).

By the way, the delays in industries coming into the ETS that were forced into the legislation will cost NZers half a billion dollars. Ace, that would have been a nice tax cut.

You must be kidding? Every single cent of this liability ends up at the end consumer.

R

Just a point to remember.

It was the National Government who signed us up to the Kyoto Protocol.

The ETS will do sweet fuck all to reduce emissions. If anything the price signals might increase emissions as production is offshored to non compliant nations (after all the demand will still be there).

Country has been left with a massive expense with sweet fuck all (if any) positive environmental outcomes, and potential negative consequences ont he environment as a result.

Good one. Feel good legislation so we can be seen to be "doing something" the only problem is the cost of doing something is no where near where the benfiits are, and most of the goods where the costs are placed are reasonably inelastic productsw here demand won't decrease when price increases (i.e. fuel, power, food, etc)...

And most of NZ are a) economically and b) environmentally illiterate, so neither major party will do anything to actually fix it - end result, shitty policy, that rapes the economy, does nothing (measurable) to help the environment, all due to voter ignorance.

But seriously guys, don't go thinking that the nats would have done any better.

They would have jsut allocated costs differently, assfucking the economy in a slighly different way and ensuring their mates didnd't have to foot the bill.

Perhaps we should pull out of Kyoto and call for a new union in emissions mitigation.

An Pigouvian Tax with NZ taking the lead, doing it properly.

For those who would like to read more on this subject, consider these two prominent sources:

1. Life After Kyoto: Alternative Approaches to Global Warming Policies - William D. Nordhaus

http://www.econ.yale.edu/~nordhaus/kyoto_long_2005.pdf


2. Congressional Budget Office, Policy Options for Reducing CO2 Emissions

http://www.cbo.gov/ftpdocs/89xx/doc8934/02-12-Carbon.pdf

Two things:
1. General taxpayer != end consumer so you're arguing something completely different. End-consumer of emissions-intensive products will see a price rise
2. Generally I agree with you (but it's not every single cent, just most) - that's the point! Include the external cost of emissions under a Kyoto environment into the price to drive behavioural changes. It's called a price mechanism.