Govt using Carbon Tax as Diversion

New Zealand Climate Science Coalition

23 June 2006

Govt using Carbon Tax as Diversion for Power Peril

The Government has been accused of using carbon tax to divert attention from the perilous state of the country's electricity resources. "I cannot understand why the Government is still contemplating a carbon tax" says Bryan Leyland, the chairman of the economics panel of the New Zealand Climate Science Coalition.

"At a time when so many South Islanders have been without electric power for days, when Aucklanders are still waiting for an answer to why the CBD lost power for six hours, the Minister of Energy resurrects the dead duck of carbon tax, in spite of increasing worldwide evidence showing carbon dioxide having little or no effect on the natural variations in the earth's climate.

With increasing agreement around the world that the Kyoto protocol was a mistake, what is the Minister trying to achieve, if not diversion from the Government's failure to ensure New Zealanders a secure supply of electric power," asked Mr Leyland.

"Aside from the question of whether CO2 is a problem, the imposition of a carbon tax on power generation would increase the cost of power to everyone and it would mean additional windfall profits for the existing hydro power stations that generate more than 60% of our electricity. The overall result is that consumers would be, in effect, paying carbon tax on hydro power. This is ridiculous.

The other major beneficiary would be the Government whose revenues would be boosted by taxes on the windfall profits from the hydro power generators and from dividends from the state-owned generators. Perhaps that is why they are so keen on a carbon tax.

" The Government would be far better off studying the recent report from the National Academy of Sciences which casts serious doubt on the credibility of many of the studies underlying claims of man-made global warming and also studying the growing body of information that tells us that climatic variations are natural and correlate better with sun spot activity than they do with increased levels of carbon dioxide, "said Mr Leyland.

ENDS

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