Emissions scheme needs change
Drastic action needs to be taken to meet 2020 targets. Susan Edmunds reports.
New Zealand can slash the tax burden on consumers and help the environment by changing its emissions trading scheme (ETS) and introducing a carbon tax, an Auckland University researcher says.
Doctoral researcher Sina Mashinchi said it was often assumed that hitting carbon emission reduction targets would stifle economic growth. But that need not be the case.
As a signatory to the Kyoto Protocol, New Zealand is committed to cutting greenhouse gas emissions to five per cent below 1990s levels by 2020.
But in 2013, emissions were up 21 per cent on 1990 levels.
Mashinchi said the current scheme was not working and needed to change. Even though agriculture is responsible for half of New Zealand’s emissions, it is exempt from the scheme across the world.
He said the price of carbon credits, at about $17 per tonne, was too low to change behaviour.
But even increasing it to $300 over time would not get New Zealand to its targets.
Mashinchi said if the price of carbon credits increased to $75 immediately, and rose by $20 a year from now on, and a carbon tax for non-ETS sectors was introduced and set at the same levels, the government could use the extra tax take to lower GST by 2.5 per cent to 12.5 per cent.
A business would either pay for carbon credits or pay a carbon tax – not both.
According to the modelling, this would stimulate the economy, encouraging investment in new technologies, energy efficiencies and public transport, which would create jobs. GDP would rise by an average 2.2 per cent per year from 2016-2015, while emissions would fall 14.2 per cent from current levels in 2030.
‘‘This still falls short of our Kyoto target, but it’s a lot better than emissions going up,’’ Mashinchi said.
He said the move would be winwin-win – good for the environment, business and consumers.