Carbon tax will only work if its recycled properly: Greens

The economic impact of the Government's new carbon tax will depend on how it is recycled through the economy, Green Co-Leader Jeanette Fitzsimons said today.

"This is an opportunity to begin a tax shift away from enterprise and income and on to ecologically undesirable activities," said Ms Fitzsimons, the Green Party's Climate Change Spokesperson, "which has been the Greens' policy for more than a decade".

"The aim is to encourage the use of renewable electricity generation, rather than coal, and the use of much more efficient transport solutions.

"However, we must ensure the brunt of the change is shared fairly. Large energy intensive industries can negotiate an exemption from the tax if they invest in world best-practice energy efficiency, so without an appropriate recycling mechanism this carbon tax will fall hardest on individuals, particularly transport users.

"The Greens believe the best way to recycle the income from the carbon tax is to reduce the income tax on the first $5000 that everybody earns. This is inherently fair, because every taxpayer would get the same rebate. In turn, it provides people with the means and the incentive to invest in energy-saving technology in their home and small businesses and adopt transport practices that reduce their exposure to the carbon tax.

"The point of this carbon tax is get people to change their behaviour so that they use less fossil fuel, which in turn will create the market for renewable energy, such as wind power, and energy efficiency initiatives.

"Climate change is serious and accelerating. Just in the last year we have seen more change than the initial models predicted, with major melting of Artic sea ice and glaciers and calving off of ice shelves in the Antarctic. Our economy, society and culture depend on a stable climate, so humanity needs to be acting to reduce its impact on the atmosphere now.

"Arguments that New Zealand is too small to tackle this problem or that we should wait for the rest of the Western World to take its responsibilities seriously are simply fatuous. Faced with the global scale of this crisis and its likely specific impact on New Zealand, the best that our country can do is to be part of the world community of responsible nations that are trying to find collective solutions.

"So we welcome the carbon tax initiative announced today, which we have supported since it was first mooted by National's Simon Upton in 1993. But today's announcement is only half the story, we call on the Labour-led Government to ensure that the recycling of the resulting revenue is equitable and helps achieve the behaviour-changing goals of the tax itself," said Ms Fitzsimons.

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