Slow phaseout of ETS pollution subsidy a let down

Friday, 27 May 2016, 11:14 am
Press Release: Generation Zero

Slow phaseout of ETS pollution subsidy a let down - Generation Zero

Thursday 26 May

FOR IMMEDIATE RELEASE

Youth climate change organisation Generation Zero is pleased the Government is at last removing the two-for-one pollution subsidy in the Emissions Trading Scheme, but says the slow phase-out and the indefinite extension of the $25 per tonne price cap is “a big let down”.

“We had hoped for the 2-for-1 subsidy to be removed immediately and a plan to raise or remove the price cap, as we argued for in our submission on the ETS review,” said policy spokesperson, Paul Young.

In 2011, the ETS Review Panel advised the Government to phase out the two-for-one subsidy by 2015 and raise the price cap each year to a level of $50 per tonne by 2017. [1]

“The ETS changes announced by Minister Bennett today are weaker than what the Government’s own review panel advised it to do five years ago,” said Mr Young.

Modelling produced for the Government by NZIER found that keeping the price cap at $25 per tonne could increase New Zealand’s net emissions by over 11% (8 million tonnes) in 2020 compared with a scenario where the price rises to $50 per tonne. [2]

“By keeping the carbon price down, the Government will be missing out on opportunities to reduce our emissions and making it harder to meet our 2030 target,” said Mr Young.

“Putting an effective price on carbon pollution is not something to fear. It’s about reflecting the real cost and damages that pollution will cause and the risks of staying hooked on fossil fuels.”

“A strong carbon price will foster innovation and efficiency, and help drive our economy to be more competitive in the low carbon future the whole world signed up to in Paris. And it will channel money from the things that are creating the climate crisis into the things that will help solve it.”

“The Government’s announcement today is a long overdue step in the right direction, but we need much stronger policies to get our country on track on climate change.”

[1] 2011 ETS Review Panel report

[2] NZIER, Economic impacts of removing NZ ETS transitional measures

ENDS

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