Aug 31, 2008

Greens Don't Understand The ETS

This exchange with the Greens on the ETS has been most revealing. First it exposed exactly what we suspected on NZ First's big ask for the ETS - fishing. Pay and we deliver!!

But it also shows how little even the Green Party understand about the operation of this major change to the way our economy is to operate. Lets start with this quote from Green co-leader Fitzsimons

The Greens certainly aren’t keen to subsidise the fishing industry. However, it is the only trade-exposed sector that wasn’t to get any free units. That means, there is a process in the Bill whereby business that mainly competes with overseas firms who pay no carbon price get some of their emissions covered by free units. The idea is that if they don’t, they have a strong motivation to move overseas where there is no carbon charge, with no benefit to the climate but loss of jobs in NZ. The reason the fishing industry didn’t initially get any is that their energy source is diesel which as transport fuel, doesn’t generally qualify for free units because for every other industry it is used within NZ and not in competition with overseas firms. However for the fishing industry it is their main source of energy and they are directly exposed to competition from foreign fishers.Every other trade-exposed industry is eligible for 90% of their 2005 emissions for free with the phase out starting only in 2019. Fishing will get up to 50%, and only for the first three years.

Is agriculture not trade exposed? Are our tourism and education sectors not trade exposed? Education and tourism get no free allocation. Agriculture gets none until 21013. Yet all these industries will have their costs increased from inputs from electricity and transport fuels increased from 2010 and 2011. There will be zero compensation. Yet the poor old fishing industry gets a 50% subsidy on its one energy input - diesel for the first three years. Farmers don't get this straight away. Why? Because they don't donate to NZ First. Simple. Shame that the Greens are happy to go along with this. And shame on the MSM for missing this.