Claim Govt Will “Make Billions” From Emissions Plan
May 15th, 2008
The Govt stands to make windfall gains of billions of dollars from its emissions trading scheme claims Solid Energy’s Don Elder. Appearing before Parliament’s Finance and Expenditure Select Committee Elder highlighted the extent to which the Govt would over-recover from NZ emitters including the transport sector the cost of complying with the country’s obligations under the Kyoto Protocol. He says the the Govt scheme in its present form will impose a carbon liability on every litre of transport fuel (from 2011). While Kyoto gives the Govt a free allocation of units up to 1990 levels, under its proposed scheme, petrol consumers get no such break and so pay the full cost.
Tax System Change. The scheme does give free allocation – to 90% of 2005 levels – to large industrial emitters but will be reduced to zero between 2018 and 2030. Elder estimates in 2012 the Govt would get units in excess of what it needed worth $500m, assuming a conservative carbon price of $30 a tonne. By 2030, with a carbon price of $100 to $200 a tonne, the Govt would make an extra $5bn to $10bn a year. In effect this represents a substantial change to the tax system, which should be debated up-front and not introduced as the unintended consequence of an environmental Bill. The road transport sector alone which produces 16m tonnes of emissions per annum, if faced with carbon charge of $30 per tonne will face additional costs of up to $480m per annum.
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