KEY POINTS:
Anytime anyone mentions the words "emissions trading" my eyes roll back in my skull, my head slumps and I enter an almost catatonic state of boredom.
I suspect this is what the Government is counting on most of us doing, otherwise there would have been a riot when
it announced details of its emissions trading scheme last week.
If Labour announced it had come up with a cunning plan that would, over the next decade and a half, see 20,000 jobs evaporate, GDP shrink by $6 billion, dairy farms drop in value by 40 per cent, sheep and beef farms become worth a quarter less, you and I have $3000 less to spend every year, retail prices rise and our wage rate fall by $2.30 an hour, I suspect we would be none too pleased.
Yet, according to the highly reputable New Zealand Institute of Economic Research (NZIER), this is what the Government's emissions trading scheme will do. The NZIER is not alone in its criticisms, the Sustainability Council argues that under the Government's programme the big polluters will get a free ride, while households, small business and anyone who uses an internal combustion engine on the road will pay through the nose.
I have no problems paying much higher prices for petrol if I am secure in the knowledge that the Bluff aluminium smelter and Fonterra stakeholders make bigger profits at my expense. Hang on. Yes I do. I'm bloody furious.
The Sustainability Council says that because of the scheme's staggered entry, with farming and big business given several years to sort themselves out, two-thirds of the country's emissions will fall outside the scheme over the next five years and road users will carry the burden instead. It has worked out road users will pay $1.34 billion more than their "fair share" of the bill from Kyoto.
Climate Change Minister David Parker describes it as "an effective approach to reducing New Zealand's greenhouse gas emissions" and meeting our commitments under the Kyoto Protocol. Yeah, right.
New Zealand produces 0.4 per cent of the world's carbon emissions. This move will reduce our national emissions by 0.1 per cent. So, we are going through all this pain to reduce the world's pollution by 0.1 per cent of 0.4 per cent. Meanwhile the planet's greatest polluters, not tied by the Kyoto Protocol because they never signed it, continue to pump increasing amounts of crud into the atmosphere and reap the financial rewards of doing so. So much for New Zealand's international competitiveness.
The NZIER says, of course, New Zealand's economy will continue to grow and you and I will get wealthier, only we won't be as rich as we could be. It says, with some justification, the emission plan will hurt us more than it should and suggests fairer across-the-board taxes to fund our Kyoto commitments. The Government stubbornly disagrees, declaring it is right and everyone else wrong.
The NZIER's chief executive, Brent Layton, told me he didn't want to sound churlish but the institute has been proved right and the Government wrong on emissions trading before. Several years ago, when the Government was crowing about how New Zealand would make a fortune out of the international credits scheme, the NZIER warned that we were going to lose big money. The institute was quickly proved correct and the Government embarrassingly and expensively wrong.
Incidentally, the NZIER says one of our biggest advantages internationally is the fact we are a world leader in producing electricity from renewable resources.
However, over the next few decades I fear we will lose a lot of that advantage, mainly due to the Resource Management Act, which is strangling any attempt to create more power generation.
With hydro lake levels at 60 per cent of average storage last week, the Government again warned of a looming power crisis this winter and signalled it would start a big campaign to encourage us to save power.
We suffered power crises in 2001, 2003, 2006 and now 2008. National's Gerry Brownlee wryly observed that while the Government put the blame on dry weather "these so-called one-in-60-year events are proving to be far too common". Indeed, they appear now to be one-in-two-year events.
Brownlee contends the Government urgently needs to "future proof" our energy infrastructure and build more generating capacity.
Transpower's Dr Patrick Strange agrees. He told me that the country does need a fallback position so that if, for example, the New Plymouth power plant is forced to close we don't need to start planning for shortages.
I guess we could use that several-centuries-old stockpile of coal we have buried in the ground to make more power, but that would simply mean we have to pay a hell of a lot more for the emissions. Don't you love Kyoto?
