NZ ‘leads the world’ by lagging behind Australia on carbon

Luke Malpass

11 November 2011

While cheers and jeers were heard in federal Parliament in Canberra when the so-called ‘clean energy future’ legislation was passed in the Senate this week, a much quieter emissions announcement took place in Wellington.

In 2009, the National-led government unveiled what was then the world’s first all-sectors, all-gases emissions trading scheme. This week, the same government quietly announced that parts of the scheme would be delayed because they were too expensive and the benefits were not clear.

Carbon pricing is no longer a big a political issue in New Zealand. The National Party has a massive lead in the opinion polls (52.5% of the primary vote). And those who staunchly oppose an emissions trading scheme will probably vote for it anyway.

Hence the shelving of some elements of the emissions trading scheme is not driven by retail politics but by real concerns that moving too quickly will harm New Zealand’s international competitiveness while doing little for the environment.

Moving towards the much-vaunted ‘clean energy economy’ remains the official policy. Yet agriculture will not be included in the scheme until ‘at least’ 2015. The official announcement explained that the absence ‘of any practical and real technologies to reduce agricultural emissions means that it would only impose a cost or tax on our most important export industry.’

While Australia moves full steam ahead of the world on carbon tax/emissions trading, the Key government has overseen an orderly and slow but persistent retreat. Due to the real world costs of pricing carbon, New Zealand has pulled back and is no longer leading the world. And that seems like the sensible thing to do.

Luke Malpass is a Policy Analyst with the New Zealand Policy Unit of The Centre for Independent Studies.

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