Friday, May 09, 2008

National ready to swallow the Emissions Trading rat

National's about ready to swallow the dead rat I said they would, but with the garnish of something healthier.  Today's National Business Review reports

The National Party is willing to support the government’s troubled Emissions Trading Scheme [ETS] in return for dumping the bill’s proposed 10-year ban on new thermal electricity generation.

Given the parlous and creaking state of NZ's electricity generation -- which will be running at and probably beyond capacity this winter -- dumping the ten-year ban on new thermal electricity generation would almost be worth the huge imposition of resuscitating the government’s Emissions Trading Scheme, which without National's help is all but dead. 

Almost.

As the CEOs of BP and Solid Energy pointed out this week however, the Emissions Trading Scheme is not so much a market as a substantial new tax, one that could net the government around $80 billion by denuding producers of the capital they need to grow.  This is a huge imposition, and even the dumping of the thermal electricity generation moratorium isn't worth that.

And since the Resource Management Act (RMA) acts as a de facto moratorium on the construction of new thermal electricity generation -- it has been used to bar, delay or make much more expensive the construction of every new thermal electricity generation project in the last ten years -- then unless the Resource Management Act is dumped, the ending of the moratorium is all but worthless anyway.

If National wants to dump the moratorium, as they should, they should simply announce it as policy and go to the country with that as their platform.  And if National really wants to allow the construction of new thermal electricity generation, as they must do, then they really must get their head around the abolition of the Resource Management Act.

If they have any honesty, that's what they must do.  As I warned back in 1998, the anti-industrial 'green dream team' of the RMA and Kyoto (which is behind the ETS) has the potential to drain our industrial lifeblood.  NZ's commitment to both needs to go together.

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2 Comments:

Anonymous Raf said...

The government continues to tie itself into complex knots which it can never escape from. It's sheer madness economically and it will not have the desired impact.

They should just give up trying to solve the climate change issue and wait to see what the major emitters come up with. Kyoto is dead and buried and its time for NZ to get back to the basics and stop wasting money trying to design solution that wont hurt.

Fuel prices will do the job quite nicely for now.

The ETS like the carbon tax before it should be consigned to the policy waste basket.

5/09/2008 10:47:00 am  
Blogger Lyndon said...

If it's a dead rats it was swallowed a long time ago. National have been arguing for emissions trading ever since - even slightly before - they decided to officially support doing anything about greenhouse emissions.

For eg National welcomes Govt u-turn on emissions trading (April 07)

5/09/2008 02:23:00 pm  

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