3 Jun 2014

Greens sticking with carbon tax policy

10:28 pm on 3 June 2014

The Green Party says it will press ahead with a carbon tax to deter greenhouse gas emissions, despite opposition.

The policy hit turbulence on Tuesday just two days after getting airborne, with the Labour Party opposing it and Maori interests fearing it will cost them money.

Kinleith pulp and paper mill.


The Greens plan to campaign for the election on phasing out the Emissions Trading Scheme (ETS) and instead taxing industrial polluters $25 a tonne on their carbon emissions.

The Greens say a carbon tax at the right level would steer people away from climate-hazardous activity in favour of cleaner enterprises. The party says the ETS was not deterring greenhouse gas emissions as intended and a carbon charge was a simple and transparent tax on pollution.

Labour, the Greens' prospective coalition partner, introduced emissions trading in the first place, and its finance spokesperson David Parker wants the scheme retained.

"We're happy to consider (the Green Party's) alternative but we do note we favour an Emissions Trading Scheme as opposed to a carbon tax."

The Greens say this disagreement is fine; they are a different party from Labour and whichever side wins the argument will depend on how many votes are gained at the general election on 20 September.

An official at the Iwi Leaders Forum fears any end to the scheme could cost Maori interests. Chris Insley said iwi own between 30 percent and 40 percent of a form of emissions credits known as NZUs.

"If you do the maths, at current price, three or four bucks, it's a big number, so there needs to be some serious thinking through what happens to those NZUs."

Cost to jobs - Govt

The Government says a carbon tax would cut jobs and make the export industry less competitive.

Tim Groser.

Tim Groser. Photo: AFP

Climate Change Minister Tim Groser told Radio New Zealand's Morning Report programme on Tuesday a carbon tax would have a negligible effect on the wider problem of climate change, which he said required a global response.

"If you ramp up the price in New Zealand, making our exporters less competitive, it would have an absolutely negligible effect whatsoever on the problem - just put people out of work and hamper our industries."

But Green Party co-leader Russel Norman rejected criticism the plan did nothing to change consumer behaviour, while putting vulnerable parts of the economy at risk.

"Over time, every economic report is very clear about this is that prices do affect behaviour and making sure there is a price on carbon is the cheapest way to do it."

Russel Norman.

Russel Norman. Photo: RNZ

Dr Norman said revenue raised from the tax would go back to to households in the form of a tax cut and to businesses in the form of a company tax cut.

Norman rejects dairy farm threat

Announcing the party's Climate Protection Plan at the weekend, Russel Norman said dairy farmers would pay $12.50 per tonne in emission charges - half that of industry. That would equate to 8 cents per kilo of milk solids, or a levy of $29.95 per cow.

Sheep and beef farmers would not initially be included because, unlike dairy farmers, he said, they could not afford it. Figures show dairying generates 42.9 percent of agriculture's emissions, while the sheep and beef industries combined account for 48.6 percent.

Critics of the Greens' policy have said the levy could put many dairy farms out of business, but Dr Norman told Morning Report economic analysis showed that would not happen.

"We modelled what it looks like ... the bottom ten percent of dairy farms, the worst performing dairy farms, they're still profitable."

'Clear incentives'

A network of more than 50 environment groups says the Greens' climate policy package is economically sound and will protect the country's most vulnerable farmers.

Environment and Conservation Organisations network spokesperson Cath Wallace said the policy would provide clear incentives for de-carbonising investments.

"The lack of an effective price on carbon - greenhouse gas emissions - means that the emissions trading system which was set up to send that price signal just hasn't been operating. It's had so many exemptions.

Ms Wallace said the absence of a charge for beef and sheep farm emissions was a huge concession to farmers who had not converted to dairying despite the much higher returns.

Forest and Bird spokesperson Kevin Hackwell said the party was right to be campaigning for an end to subsidies for major greenhouse gas polluters. He said the best way to reduce pollution is a clear and simple system requiring those who pollute to pay.