Cabinet ETS paper makes my toes curlRichard Treadgold | May 20, 2012
I have received a copy of a confidential Cabinet briefing paper obtained under an Official Information Act request. It was prepared by Nick Smith as Minister for Climate Change Issues before his resignation.
The paper sets out proposed amendments to the Climate Change Response Act 2002 and the ETS.
It begins by stating the Minister’s key motives. I could scarcely believe them — they so strongly exclude each other they make my toes curl, yet the language makes me feel good! I trust them, I really do! I’m sure I do. No matter what self-contradictory aims the government expresses, I’m full of faith that a) it means well and b) it can do exactly what it says. Like the following:
Key strategic drivers for my most significant proposals outlined in this Cabinet paper are to:
- ensure that the ETS more effectively supports the government’s economic growth priorities: providing more flexibility and mitigating short-term costs for business whilst ensuring clear long-term price signals that encourage a smooth transition to a low-carbon economy.
- ensure that the ETS is flexible enough to cater for a range of international outcomes in the period 2013 to 2020, and in particular can more precisely deliver whatever level of international emissions reduction effort New Zealand may wish to demonstrate in this period.
Nobody, not even the Greens in high-spin mode, could seriously dispute that the ETS is an impost on production. That is because it assesses a small subset of an enterprise’s productive emissions (CO2 and a few other gases) and applies an artificial cost to them. It’s artificial because the gases are not being bought or sold, or even delivered or received — hell, believe it or not, they’re not even being measured. The cost is paid from the proceeds of production as there is no other source of funds. Those gases were free until the government declared otherwise. (The government squirms in denial, but that fact alone makes it a tax.)
So the Cabinet is being told in this briefing paper that the extra ETS cost on production can not only support, but it can more effectively support “the government’s economic growth priorities”. Really? How?
How can an extra cost help economic growth? Why would the proceeds of production increase when there’s an extra payment to make? It doesn’t make any sense. These words are used simply to make the concept seem acceptable.
Then he wants the ETS to reduce short-term costs while making sure that long-term costs still sting. By “mitigating short-term costs” while calculating a “long-term price … that encourage[s] … a low-carbon economy.”
What? “We must make this rope longer while it gets steadily shorter!” This is nuts. If New Zealanders accept this blatant soft-soap treatment, they deserve to have their mouths fill with bubbles. These are lies.
And they are lies we can’t believe. Because if they’re based on facts, on truth, people will actively seek out good solutions. They won’t need to have unfriendly remedies invented by starry-eyed environmentalists rammed down their throats by the government.
If a so-called low-carbon economy is for any reason more beneficial than our present normal carbon economy, the marketplace will discover that fact and implement its own solutions to achieve it. All it needs are the facts. It doesn’t need any committee-created incentives – no horse with humps. Committees are NEVER better than actual people.
When timber reached the right (high enough) price, the marketplace found answers in plywood, particle board, bison board and customwood. We still got the furniture we wanted and no government incentives were required.
When horses proved dirty and expensive to keep in large numbers in urban settings, visionaries saw the possibilities in the new petroleum products. They recreated convenient transport in modern cities in a stunningly productive way without government incentives.
When a disease makes millions of victims, medical science develops solutions wherever it can without government incentives.
If our environment really does start to deteriorate as a direct result of our carbon dioxide emissions, the marketplace will find out and make adjustments. Nobody wants deliberately to soil their own nest. A politician who believes that we do is a gullible puppet hoodwinked by green extremists who hate humanity and consider us a cancer upon the earth.
Whereas in fact we’re as natural as the purest wind-blown snow.
The second paragraph of motives is concerned with our international image. There’s a clear signal that our government doesn’t consider itself entirely independent; it looks to developments on the international stage to refine the NZ direction. They obviously consider the ETS little more than a shiny hat to wear to impress our trading partners.
Yet there is, alarmingly, still no evidence at all that a single trading partner is even looking at us sideways over our environmental performance. They are not even demanding a better performance, much less threatening to withdraw any business from us.
Our own government is blackmailing us to convert a meaningless, but lucrative, environmental scheme into a permanent tax.
It would be slightly interesting to hear how the advice that Smith received before he wrote this clap-trap managed to convince him.