The biggest tax of them all – the ETS

May 8th, 2008 at 5:13 pm by David Farrar

NZPA reports on testimony today from :

The Government could take up to $80 billion in windfall gains due to the climate change emissions trading scheme (), Solid Energy chief executive Don Elder told MPs today. …

Mr Elder said the bill was not only about climate change, but was also the most far-reaching taxation legislation since the 1980s.

He said no one had seemed to consider the possibility that even if pollution targets were met, billions of dollars would end up in the Government’s coffers.

The ETS, as designed, would punish polluters for all their emissions, not just those above the 1990 level set by the Kyoto Protocol.

Even if emissions were reduced to 1990 levels by 2025/2030, which he felt was unlikely, it would mean the Government would still collect $20b over that period.

He said the $20b figure assumed a low price for carbon — $22 a tonne — and if it was replaced with a “realistic figure” of up to $200 a tonne the windfall gain over the period would be in the region of $80b.

“Now that may well be a justified policy and it may well be able to be redistributed, but that is a tax restructure…buried inside an emissions trading system.”

Climate Change Minister David Parker said he fundamentally disagreed with the analysis and said the Government would never allow such a scenario to occur.

Mr Elder told MPs the complexities of the scheme were creating unintended consequences that saw the details change on a weekly basis.

This was complicated by the number of processes going on simultaneously to write the policy even as the committee considered the legislation.

He said that the European Union took five years to design a much more modest trading system and still got it badly wrong first time around.

The climate change bill was laying down conditions that would exist 22 years away.

“People aren’t even born yet who will probably be playing for the All Blacks by the time this legislation is still showing its teeth…yet we are rushing this through in six months and it doesn’t make sense.”

Mr Elder said instead of having a prescriptive bill, it should be rewritten into more general enabling legislation.

Then over the next year the details could be thrashed out and slotted into place.

He said the rush to put the ETS in place was not necessary as most sectors were now not being hit by the scheme until 2011 and onwards.

So who thinks the Government will refund all those billions that they will accidentially accumulate?

It is worth noting Elder is not saying do not have an ETS. He said this is a scheme for the next 22+ years, and trying to finalise it is six months is going to be a disaster. The EU took five years. And with the Government delaying the first sectors by a year, there is no real reason not to delay it.

Tags: ,

36 Responses to “The biggest tax of them all – the ETS”

  1. Grant (444 comments) says:

    “But we’re talking about the future of the human race here………….”
    G

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. peterquixote (231 comments) says:

    2008 NZ NAT GOVT

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. roger nome (4,067 comments) says:

    DPF

    You’ve been criticising the government for not acting fast enough on carbon reductions, and now you’re saying they should take longer? Sometimes this kiwiblog place can be very confusing.

    [DPF: I have criticised the Govt for action not meeting their rhetoric. I think it is sensible to take the time to get the ETS right. A few extra months will in no way be significant in terms of emissions (esp as no sector coming in next year now) and the costs of getting it wrong are massive]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. Nomestradamus (3,431 comments) says:

    PhillipJohn/Roger Nome:

    You’re suffering from Farrar Derangement Syndrome (FDS) again? Seriously, across virtually every Kiwiblog thread you comment on, you consistently play the person instead of the issue: yesterday CIS; today Roger Kerr and now DPF.

    I’m removed from the political process – but I haven’t seen anything to suggest that Labour and National have reached political consensus on potentially far-reaching legislation. To the contrary, Labour appears to be engaged in a lonely cliff-climbing exercise.

    Quoting from the NZPA report referenced in DPF’s post:

    Mr Elder said instead of having a prescriptive bill, it should be rewritten into more general enabling legislation. Then over the next year the details could be thrashed out and slotted into place.

    What exactly is wrong with that?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. george (388 comments) says:

    When is National going to drop its support for this nonsense?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. Lee C (4,516 comments) says:

    “People aren’t even born yet who will probably be playing for the All Blacks by the time this legislation is still showing its teeth…yet we are rushing this through in six months and it doesn’t make sense.””

    FFS when are you people going to stop banging on about the EFA?

    sorry.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. getstaffed (9,186 comments) says:

    My earlier post on this: This is the nub of the issue for me. Our socialists government (Cullen’s words) is simply promoting environmental concern as a lever to have more tax wealth cycled through its coffers. Money is power, and we can be sure that Helen cares more about power than she does about the environment.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. side show bob (3,660 comments) says:

    Oh for fucks sake roger give it a rest you are just looking foolish, it’s obivous that your crowd have totally lost the plot. Is treason still in the law books?. If so can I suggest all the criminals pushing this scheme be put before a judge and shot at dawn. I must be patently clear by now, even to the most stupid ( roger ) that the game is up. The EFS is a country destoryer as JFK would say, a victory for the proponents of the EFS would be left with “nothing but ashes in their mouths”.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. Lee C (4,516 comments) says:

    “People aren’t even born yet who will probably be playing for the All Blacks by the time this legislation is still showing its teeth…yet we are rushing this through in six months and it doesn’t make sense.”

    OMG are you still whittering on about s59?

    sorry.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. Patrick Starr (3,674 comments) says:

    Roger Nome, Carbon emissions. . Can you tell me with respect to emissions and things like the fart tax why cows excreets out a rather flat patty whilst a deer craps out pellets but a horse produces clumps of rather dried grass, but all of these animals eat grass and discharge methane? can you tell me why that is?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. Nomestradamus (3,431 comments) says:

    Just adding to LeeC’s appraisal of the Clark Government:

    First the fart tax. Now we’ve come full circle with the Emission Tax on Smells (ETS). So that’s two broken promises from Michael “no new taxes” Cullen – two broken promises on a rapidly growing list.

    It must be an election year!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. Steve (4,587 comments) says:

    Patrick Starr,
    “Roger Nome, Carbon emissions. . Can you tell me with respect to emissions and things like the fart tax why cows excreets out a rather flat patty whilst a deer craps out pellets but a horse produces clumps of rather dried grass, but all of these animals eat grass and discharge methane? can you tell me why that is?”

    Well Roger Nome has emissions too, pity the crap comes out of the same place he puts food in.
    His ideas and arguments get weaker and stranger by the day.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. first time caller (384 comments) says:

    Too much farting going on with those lefties

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  14. James W (271 comments) says:

    DPF,

    Why is Key still supporting the ETS? The costs are going to be massive, for little gain.

    Rodney Hide seems to be the only MP actually standing up against this nonsense.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. roger nome (4,067 comments) says:

    Wow, sure am feeling the love here tonight :-)

    DPF:

    “So who thinks the Government will refund all those billions that they will accidentially accumulate?”

    Why don’t you ask Cullen? I know it’s Green Party policy to cut personal income tax, commensurate to increases in waste taxes. If the Greens got their way this wouldn’t damage after-tax personal income levels at all.

    POC:

    “What exactly is wrong with that?”

    Nothing really, just so long as DPF stops contradicting himself :-)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. Lee C (4,516 comments) says:

    An astute politician would deal with this, get the Green party around the table and talk turkey about an alliance post election.
    Would a smart politician pull the plug on his support of the government at the eleventh hour if he were able to get the numbers on his side?
    Or is it a truism that The Green party are Labour’s bitches and there is nothing that any reasonable politician can do to break their victim-mentality?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. roger nome (4,067 comments) says:

    “Or is it a truism that The Green party are Labour’s bitches”

    Enough with the sexism hey Lee?

    The National Party will get the Greens on side if they can offer a greener policy platform than Labour, and make progress on social justice issues (i.e. they could theoretically eliminate tax on the first $10,000 on income, which would coincide with Green Party policy).

    Somehow I don’t see that happening though.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. Lee C (4,516 comments) says:

    oh fuck off roger

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  19. roger nome (4,067 comments) says:

    Ok, more sexisim then. Keep it coming Nats, it’s what your female constituency loves to see :-)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  20. first time caller (384 comments) says:

    I’m with you on this one Lee

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  21. roger nome (4,067 comments) says:

    Getting some good arguments here, but still feel like you guys could pick it up a notch a two. Say what, I’ll come back in 30 mins and see what you’ve come up with. Don’t disappoint me ! ;-)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  22. Zippy Gonzales (485 comments) says:

    Alcohol, tobacco and climate change. Nice little earners, eh. Thank You For Breathing.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. Lee C (4,516 comments) says:

    I knew roger wouldn’t be able to handle ‘bitches’. I guess all that talkin durdy really got him aroused. I don’t think he’ll be able to maintain his erection for thirty minutes though. I give him about seven minutes and then he’ll be back.
    For more durdy talk.
    The perve.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  24. Nomestradamus (3,431 comments) says:

    PhillipJohn/Roger Nome:

    [Health warning: off topic]

    You’d obviously rather threadjack than talk about Labour’s political posturing. Fine. Let’s talk about your hypocrisy then.

    Ok, more sexisim then. Keep it coming Nats, it’s what your female constituency loves to see

    roger nome (3137)
    October 12th, 2007 at 10:30 pm

    LOL… Don’t be such a sooky bitch – or are you another one of these sad losers who can’t take the smallest taste of their own medicine. I’ve had better bitch-slapdowns from children.

    Pot. kettle. black.

    [Apologies for off-topic: resume normal transmission]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. roger nome (4,067 comments) says:

    POC:

    That was a Craig Ranapai quote, directed at redbaiter (once again you appear to have been dishonest).

    Also, don’t you know, the word “bitch” isn’t sexist coming from a queen? doh!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  26. Nomestradamus (3,431 comments) says:

    PhillipJohn/Roger Nome:

    I’ll accept that I misread the comment. You say “once again you appear to have been dishonest” – which is, frankly, rich coming from the Most Intellectually Dishonest Kiwiblog Commentator (TM). Show me where else I’ve been dishonest.

    Speaking of dishonest… this is a blatant lie. I hope you plan to retract as quickly as I’ve done here.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  27. george (388 comments) says:

    Roger Nome says: “The National Party will get the Greens on side if they can offer a greener policy platform than Labour, and make progress on social justice issues (i.e. they could theoretically eliminate tax on the first $10,000 on income, which would coincide with Green Party policy).”

    In fact, all the data shows it would be IMPOSSIBLE for National to do worse on these issues than Labour has, so perhaps a National/Green alliance is on the cards.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  28. reid (16,629 comments) says:

    The issue with the ETS (apart from the small fact it’s based on a fantasy but if you ignore that) is that it’s coming in at the wrong time. It would be like launching Think Big in the days when oil was steady at $30 a bbl. Just crazy.

    If I was the govt I would scrap the ETS, remove all taxes on fuel, commit to finding roading and transport from general taxation, and commit to tax cuts, targetting them at the low end of the income curve by making the first 10k tax-free.

    In one fell swoop that would attack inflation at both ends: by removing high fuel prices and by reducing govt expenditure. There is a great deal of fat in the govt bureacracy right now, which could be significantly reduced without productivity loss and I would target that expenditure to compensate for the loss of tax revenue. The only place where that would be unpalatable is in Wgtn.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. Owen McShane (1,226 comments) says:

    The easy way to meet our Kyoto obligation is to be sensible and NOT include ruminant flatulence in our emissions calculation.

    No one else does. Ruminant flatulence is current cycle – ruminants eat grass today which has absorbed C02yesterday, and in the process of digeston some of that carbon (in the stringy bits) gets turned into methane – yesterday’s carbon. It is belched from the front end. Not the rear end.
    Also there is no evidence that we have more ruminants today than before the industrial revolution. eg More people get their milk and meat from goats than from sheep and cattle. 70 million US cattle replaced bout 70 million buffalo.
    So why did we do it? I suspect it was because Helen wanted to campaign as the white knight of Climate Change and without including cows there was nothing to campaign on.
    Also we calculate our NO2 emissions according to a rule set by the Europeans as part of the protocol. Our measured NO2 emissions on our real farms are only half this “designated” amount.
    Of course if we included our territorial waters ( a massive carbon dioxide sink) we would be in credit and would be selling credits to Mr Putin rather than buying them.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  30. casual watcher (289 comments) says:

    I see over at “the Hive” they are speculating that the Nats are going to do a deal with Labour on the ETS. That would be a critical mistake in my view. There is no need to rescue Labour this time – the Nats are winning the game without even participating and the election is just around the corner. Stick to the game plan Nats and pull some knives out and use them.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  31. Murray (8,847 comments) says:

    Must be time flipjon to change his name again. Even he must be tired of the ass kicking his current identity is getting.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  32. casual watcher (289 comments) says:

    Murray – it is only happening in your mind – no where else. The personal attacks are not working – look at the polls.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  33. IdiotSavant (88 comments) says:

    It’s also worth noting that Elder is basing his prediction on a carbon price of $200/ton which produces no reduction in emissions. That’s a bit odd, to say the least.

    I should also point out that NZ has been working on emissions trading since 1995, and the core details were worked out in 1999 by the then-National government (who naturally abandoned it, just as they’d previously abandoned a carbon tax).

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  34. gd (2,286 comments) says:

    Now of course if Dubya wanted to leave the White House in style then sometime around September he may have some chit chats with the Saudi Royal Family about the price of oil and their financing of terrorisim and suggest that OPEC get real OR Dubya might let the Iranians know that if they were to have a crack at the Saudis Uncle Sam might well be otherwise engaged.

    Think what a hero Dubya would be if oil prices dropped just as America went into its winter and the effects on its economy.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  35. stephen (4,063 comments) says:

    $200/tonne…what planet is he on?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote