There is intense activity involving all parties on the Emissions Trading Scheme. Yesterday the PM tried to shame the Greens into supporting the scheme, making the assessment that at the end of the day the Greens cannot afford to be seen to be the Party that scuppered the scheme. In other discussions NZ First and Maori are being reassured about the impact that the scheme will have on their core constituency. But is the reassurance based on the correct facts. The Hive has argued for some time that the Government is intentionally understanding the impact of the scheme (and the New Zealand liability) by using a price of carbon that is far too cheap. Government uses a range of figures for this price - last week the windfall gain from the SOE electricity generators was based on $15 a tonne. The budget and other recent analyses have used $22.50, $25 and $30 a tonne. But is $30 realistic?
This should not really be an issue, there is a market for carbon in Europe and we know what prices are today and what they are expected to be. So what will the price of carbon be in 2012 when most of the NZ economy is integrated into the scheme (agriculture comes in in 2013)? NZ$22.50? NZ$25? NZ$30? Well the European price for 2012 credits suggests these estimates are wide of the mark. The price today is $37 a tonne.
So NZ First and Maori parties. Make sure the Government are telling the truth about the impact that the scheme is going to have on your constituency. We wouldn't want you to be thrown out of Parliament because Labour hoodwinked you.....
