12 September 2012

Govt’s surplus at risk from ETS subsidies

The National Government’s aim of returning to surplus by 2015 will be put at risk by on-going and indefinite subsidies of major polluters if planned changes to the Emissions Trading Scheme go ahead, Green Party Co-leader Russel Norman said today.

The Parliamentary Commissioner for the Environment has estimated the additional costs to the taxpayer for indefinite subsidies under the emissions Trading Scheme (ETS) could range from $330 million to $1 billion over the next four years.

“The National Government’s putting one of its flagship economic policies – the return to surplus – at risk by proposing to subsidise the cost of major carbon polluters indefinitely,” said Dr Norman.

“The additional subsidies will cost the Government up to $1 billion over the next four years pushing the surplus out by a year.

“The effective removal of the price incentive from the ETS will also result in New Zealand failing to reach the Government’s target of a 50 percent reduction in emissions by 2050.

“This is crony capitalism at its worst and runs contrary to all sensible economic management of the climate change challenge that we are currently facing.”

The Green Party was also critical of the Government’s lack of effort to transition our economy to a clean, green economy – one that protected it’s ‘100% Pure’ branding while developing smart solutions to living in a carbon constrained future.

“By removing all incentives for carbon intensive industries to innovate, the National Government is protecting a large part of our economy with no future,” Dr Norman said.

“This is gross short-termism; it’s not a smart way to run an economy.

“The Green Party would restore an effective price signal in the ETS transforming current subsidies for polluters into industry-related support for R&D into low-carbon alternatives.

“We can have a healthy environment while securing a more sustainable and resilient economy at the same time.”

Link to the Parliamentary Commissioner for the Environment’s ETS submission: http://www.pce.parliament.nz/assets/Uploads/PCE-Submission-on-the-Climate-Change-Amendment-Bill.pdf

The Green Party's plan for a smart green economy: http://www.greens.org.nz/greenjobs

ENDS

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