Why the ETS gift for industry?

opinion

By Q+A producer Tim Watkin

Published: 6:44PM Wednesday September 16, 2009 Source: Q+A

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I've been wondering this week how our farmers and titans of industry can say thank you to the country. Maybe some power price freezes or some discount cheese? Because, boy, do we deserve their gratitude.

Under the new Emissions Trading Scheme announced this week , farmers and the industrial sector are the big winners, while taxpayers are the big losers. Ultimately, as those who create the most greenhouse gases - the gases that are causing our climate to change - they will end up paying the bulk of the nation's bill.

But the design of the government's new bill announced this week extends their free ride. The main points to absorb about the redesign is that a) the price of petrol and power will go up next year by less than it was going to and b) the re-jigged emissions trading scheme does nothing to reduce our carbon emissions - it simply changes who pays for them.

The agricultural sector was due to start paying for its greenhouse gas emissions in 2013; that's now 2015. So farmers get another two years free. Industry gets a six month delay before it has to start paying for its emissions (from January until July next year) and, piggy-backing on the energy and transport sectors, benefits with two and a half years of only having to pay for half the pollution they emit.

Who pays for the other half? You and me, the taxpayers. Critics are calling it a pollution subsidy. The obligation to pay only 50% of the carbon bill for the early years makes some sense in the energy and transport sectors; you can argue that it'll be tough for ordinary New Zealanders to absorb the higher price of petrol and electricity next year, so why not create a "transitional phase" until the recession is well and truly over in 2013? But why does industry get the same gift?

One reason is fear; the government's fear that big business would simply pack their bags and take their business offshore. No-one wants to lose the income and jobs created by industry, but is it fair to ask struggling taxpayers to carry them for three years? Because that's what the government has done. That means hundreds of millions of tax dollars will be paid to keep these mostly overseas-owned businesses happy and content.

The same is true for farmers. They get another two years' grace, although even that isn't enough for grumpy old Federated Farmers. It doesn't think agriculture should have to pay for its emissions at all.

On one hand, that's ridiculous. Methane from cows and sheep make up half of our greenhouse emissions and if we want to do our bit to save the planet, we can't do it without farmers stepping up. On the other, they argue that there's little they can do at the moment to cut their emissions except have fewer animals, and that only hurts our farming-based economy.

As Professor Sir Peter Gluckman said on Q+A this past Sunday , scientists are hard at work on finding ways to cut animals' methane emissions but it will be 10, maybe 15, years before significant reductions are possible.

Finding a balance of fairness while protecting our economy, our environment and our grandchildren is enough to make your head explode.

But if it's good enough for farmers and business leaders to expect a "transition phase", surely it's good enough for the poorest in our society to expect the same.

The Maori Party, which has compromised just about everything it said it stood for on emissions trading to get the government's reform bill into the House, is pushing for an increase in welfare entitlements to help beneficiaries adjust to the higher cost of power and petrol.

Heck, if Rio Tinto and millionaire farmers deserve some help, why not the poor?

Read more of Tim Watkin's blogs here.

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  • mcleans2 said on 2009-09-14 @ 22:18 NZDT: Report abusive post

    Typical. There has to be a free ride for Maoris. When will this racism stop and the Maori party get over the Treaty. There were plenty of wars in the 1800's when the Maori and Eurpeans were at war. Europeans won get over it lets move on in the 21st century together. The treaty divides the country.

  • jl555 said on 2009-09-14 @ 19:55 NZDT: Report abusive post

    If human and most other life is wiped from the face of the earth through our (in)actions it's not going to matter a damn how rich we are. The problem is using unsustainable resources and polluting is so cheap! People will not change their behaviour until there are clear and present consequences. The FULL and TRUE cost of the use of resources and pollution must be paid by those who engage in these behaviours. And it is the governments responsibility to enforce this.

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