Bullshit

That’s my generous term for the Government’s claim that if one doesn’t rush the ETS into law in June, it increase our emissions and cost us more.

The reason it is bullshit is because Labour itself had already announced that the transport sector would not come into the scheme until 2011 instead of 2009. No sector (except forestry which soaks up emissions, no produces them) is in before 2011 now, so taking 3 to 4 more months to get the scheme right has almost no downside.

The hypocrisy of Labour delaying the transport sector coming into the scheme by two years, and then complaining about a delay of just a few months, is as usual quite large.

It is interesting to look at the Government’s resonse to Key’s six areas of concern:

Key: The ETS should be fiscally neutral rather than providing billions of dollars in windfall gains to the government accounts at the expense of businesses and consumers. National does not think it is responsible for the Government to use green initiatives to swell the Crown coffers at the expense of Kiwis’ wallets.
Parker: The ETS would not result in a surplus of credits for the Government in the short term, and any surplus that might result later depends on New Zealand’s target under future international agreements. The five-yearly reviews of the scheme are the way to take account of that.

First of all, note the weasel words – in the short term. That may just means the first couple of years. Now government officials have admitted a profit for the Government of up to $22 billion. There is no requirement in the current law for this to be refunded to consumers and businesses. Now if anyone really believes the Government would voluntarily reduce the amount of money the scheme makes, then I have a bridge they may wish to buy.

After all, remember how it has taken nine years to get tax cuts – and that has been with some of the highest surpluses in the world.

Key: The ETS should encourage the use of technologies that improve efficiency and reduce emissions intensity, rather than encourage an exodus of industries and their skilled staff to other countries.
Parker: The select committee and the Government are already considering intensity-based allocation within a cap.

Now this is absolute proof positive that any revised bill needs to be opened up to a second round of submissions. A change to intensity based allocations would be a major major change, and the impact on stakeholders would be very different to the current proposed law. It would be economic vandalism to make such major changes without any ability to have comment and input on the new model.