ETS Article by Pat Gregory

Hold on to your hats folks – the Emissions Trading Scheme (ETS )is going to hit and hit hard. If you think you’re struggling to pay your electricity bill now, just wait till this scheme has been introduced.  Many farmers are already against the wall and verging on bankruptcy - imagine what this is going to do to them! This tax is based on very questionable science at the best, and what has been termed as outright fraud at the worst!

 

Just what is the ETS going to mean to New Zealanders? Our Prime Minister and politicians must answer the question “Why, when major European countries such as Germany, Italy, Spain, and  France, have abandoned their ETS schemes, is New Zealand going ahead with ours?”   Since our ETS tax was passed into law, the Copenhagen climate talks have broken down and there is now no expectation that there will be a comprehensive worldwide climate agreement to replace the Kyoto Protocol from 2013. 

 

National had expected Australia and the US to introduce an ETS, but this has not happened. Our Prime Minister needs to take note of this instead of blindly going ahead with our ETS. Even if New Zealand is 100% successful in reducing emissions, our contribution on the world scene is absolutely miniscule, yet in seeking to meet this idealistic target, it has the potential to bring New Zealand to its knees. 

 

If  the ETS comes into being, farmers and exporters in particular, are going to be badly hit  as the latter will not be able to pass these increases on  to their foreign customers. Already many farmers have changed their farming practises and have converted parts of their property into forestry. By 2013, it is very likely that many farmers will find farming untenable and will thus be out of business as the costs of the ETS increase.

 

Another question that needs asking is “What effects will the ETS have on the average New Zealander?” Well first of all Treasury forecasts that electricity costs will immediately rise by 5%, and this will occur in winter - the worst possible time. A further 5% increase is expected in 2013. The way the ETS tax works is to effectively impose a tax on electricity generated from thermal sources such as coal and gas. However the increased price applies to all electricity, allowing those generating electricity from renewable sources, such as hydro, geothermal, or wind, to charge consumers more for their electricity without paying the tax, thus resulting in massive windfall profits to companies such as Meridian, Mighty River Power, Trustpower and Contact.  These windfall profits will total many hundreds of millions of dollars, and will be paid for by the consumer.  It’s safe to say that the Government will love the ETS!  

 

Treasury also advises that petrol will rise 4 cents a litre and that the flow-on effect  to consumer s of these impositions  will mean an additional  4% increase in prices..

 

Now that the proposed increase in GST is going ahead, it is not difficult to see that the cumulative effects on the nation  of the increased GST, the ETS and rising petrol prices will be very far-reaching just as it is beginning to crawl out of the recession; It is questionable whether the country will be able to recover from such an onslaught..

 

It is my belief that the ETS, should be abandoned or at least be delayed until the rest of the world sorts itself out. To everything there is a time and a season – this is not the time or the season for introducing an ETS.