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Parker's view at odds with economists

16 October 2008

Climate Change Minister David Parker’s claims that making the productive sectors pay for emissions via the emissions trading scheme is cheaper than if the taxpayer (government) paid for the Kyoto shortfall is completely at odds with analysis undertaken by leading economists, NZIER.

Catherine Beard, executive director of the Greenhouse Policy Coalition, says the NZIER analysis showed that it was eight times more expensive in the near term to put all the costs onto producers and exporters, than if the government just paid the bill.

“The reason it is so expensive to put all the cost on to producers is because in the absence of all your trading partners pricing carbon, all you achieve is a loss of competitiveness of local industry and relocation to other countries where those costs will not be faced.”

“Making your local producers internationally uncompetitive and causing plant closure and business re-location is a high cost strategy.”

“This is a risk that is recognized by most governments internationally, which is why many governments with Kyoto Protocol obligations have been actively purchasing credits on behalf of their country in the international carbon markets for some years now.”

Catherine Beard said at a time of economic crisis when European countries are in full retreat from expensive climate change policies, it is foolhardy to be pursing policies that will cost New Zealanders jobs and increase global emissions.


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