Colin Espiner, of the Press, writes in an opinion piece about the difficulty of developing an ETS which cuts carbon emissions without hobbling the economy.
In the piece, he spells out both the the practical and political issues behind the ETS, the confusion behind National’s recent deal with the Maori Party, and the importance of passing an ETS not by a slim margin, but with major political support – something which can only be done if National and Labour are able to agree.
An excerpt: (read in full here)
“An ETS, at its most basic, is simply a market signal – the more emissions you produce, the more it costs you. There’s an incentive to cut emissions to save money.
“However, by transferring much of the cost to the taxpayer, National has removed this price signal from large industrial emitters and farmers, at least until 2050. You don’t have to be a Nobel laureate in economics to realise that if something’s cheap and plentiful, you use more of it.
“Of course, there’s no such thing as a free lunch, and we will all have to pay for our emissions one way or another. If taxpayers weren’t picking up the tab, we’d still be paying through a bigger increase in the costs of goods and services, as businesses sought to pass their costs on to the end consumer.
“So it’s a balancing act, as Key has admitted, between trying to make industry responsible for its own mess without screwing up the economy at the same time.”