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$4.5 billion climate fund won't cut emissions, should be returned to taxpayers - NZTU

Contributor:
Fuseworks Media
Fuseworks Media

The New Zealand Taxpayers' Union is slamming the Government's announcement that ETS revenues will be ring-fenced in a new 'climate emergency' fund.

Union spokesman Louis Houlbrooke, who attended today's Treasury lock-up, says, "First there was the infamous Provincial Growth Fund, then the COVID response fund, and now the 'Climate Emergency Response Fund' is the latest multi-billion dollar pot of money given a cute name to obscure the extraordinary freedom it gives to politicians seeking to buy votes."

"The point of the ETS is to impose market-driven prices on emissions that incentivise companies and households to cut emissions in cost-effective ways. It was never meant to create a slush fund for politicians to spend on feel-good, green-washed initiatives like electric ferries and urban beautification."

"In fact, because our emissions are capped and traded under the ETS, spending projects from the new climate slush fund won't actually cut New Zealand's emissions. Any emissions reduction from, say, petrol vehicles, will simply free up credits to produce emissions in other parts of the economy. This is called the waterbed effect and it is well understood at Treasury and among ETS experts."

"James Shaw's insistence on turning the Emmissions Trading Scheme into a tax grab may backfire by eroding New Zealanders' support for the only initiative that is actually working to cut emissions. A better proposal would be to simply return revenues from the ETS to taxpayers via a carbon dividend, as is done in Canada."

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