Brian Fallow’s column in this morning’s Herald points out the uncertainties over the cost of carbon.
The price the Government is assuming for the purpose of reporting its liability under the Kyoto Protocol in the Crown accounts is €11 ($23) a tonne.
But the high-quality, low-risk units New Zealand companies with obligations under the scheme are expected to favour are trading for €20.
And is the money being paid for this hot air going into research or developments which will improve the environment? No, and it might even make it worse:
It would be a perverse outcome for the global climate if growth of the pastoral farming sector in New Zealand were hobbled by climate change policy here, only for the demand for dairy products and meat it might have satisfied to be met instead by production elsewhere in the world whose carbon hoof-print (emissions per litre of milk or kilogram of meat) is greater.
Agriculture isn’t the only area where exporting emissions is likely and that’s because of a basic flaw in the Kyoto protocol. It takes a country by country approach to a global problem which means carbon emissions might be reduced in one place but increased elsewhere by moving production.
We pay the economic and social cost and the whole world pays the environmental cost because the ETS will add to the costs of production, transport and consumption but won’t reduce emissions.
It’s an expensive feel-good achieve-nothing fraud.