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Parker's view still at odds with economists

5 November 2008

Climate Change Minister David Parker’s claims that the current emissions trading scheme will not only be good for the environment but will increase jobs during the predicted slump are completely at odds with the views of our leading economists.

Analysis by NZ Institute of Economic Research, shows that as a result of the emissions trading scheme, New Zealand companies will become less competitive internationally, which will lead to significant job losses, in the region of 20,000 in the next four years.

In addition, the production that used to come from New Zealand will be replaced by production from countries that do not price carbon and which are more energy intensive than New Zealand, leading to a growth in global emissions.

Catherine Beard, executive director of the Greenhouse Policy Coalition, says even the government’s own economic analysis by Infometrics in 2007 put job losses in the region of 52,000.

“The reality is that unlike bigger nations, in many of our industrial sectors we have only one significant company. If companies in our steel, aluminum, cement and glass sectors were to close or reduce production, then we have not only lost those jobs to Asia, but we will be forced to import those products at a greater environmental cost.”

Catherine Beard said the idea that you can create new jobs out of the destruction of existing jobs thereby benefiting the economy – is in the words of economists Castalia just “economically illiterate”.

“Castalia point out that reallocation of resources within an economy is a different concept to growing an economy and increasing wealth. This is because the reallocation of resources takes them away from the area of highest return and requires them to be used less efficiently.”

“The sad fact of the matter is that while other governments around the world are trying to work out how to reduce the impact of climate change policies on their stressed economies, David Parker is not having any second thoughts about the wisdom of increasing all our energy costs and putting jobs at risk for little or no environmental gain.”

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