Wednesday, June 30, 2010

Quantifying the economic effects of the ETS fraught

Statistics NZ has released a paper about measuring the effects of the ETS. In summary;

Key features to note about the measurement of the impact of the ETS are:

* ETS transactions between residents and non-residents are currently treated as intangible non-produced non-financial assets in the Balance of Payments (BoP) statistics.
* Individual transactions in derivatives associated with carbon emissions will be captured in the BoP statistics but will not be separately identifiable from other financial derivatives.
* The international treatment of emissions trading in the National Accounts is still being decided.
* The impact of the emissions trading will not be captured directly in the current suite of National Accounts (and related) measures, although they will be indirectly captured in many of the National Accounts data sources. It will be difficult, if not impossible, to distinguish the impact of the ETS scheme on the National Accounts from that of other factors.
* Environmental measurement statistics will be undertaken by agencies other than Statistics New Zealand (eg the Ministry for the Environment will measure the rate of emissions in the Greenhouse Gas Inventory and changes in land use via the Land Use and Carbon Analysis System (LUCAS)).
* These environmental measures will record changes that may arise from the ETS scheme, but not its economic effectiveness.
* Greenhouse gas emissions and energy efficiency have been identified as core topics in the finalised energy domain plan and environmental domain plan currently under development.
* The purchase of emissions units will not directly appear in the current suite of price indexes (consumers price index, producers price index).
* Indirect price impacts from the operation of the ETS scheme will be captured, but the attribution of how much of a price change is due to the operation of the ETS scheme will not be possible.
* The Annual Enterprise Survey (AES) will capture some information, but under the current questions this data will not be identifiable.

New Zealand embarks on a scheme tomorrow that it is going to be almost impossible to evaluate. Unreal.


Manolo said...

Unreal indeed.

Why are we doing this? What's in it for Key and Smith?

NZ is embarking on a taxation experiment which will hit our economy.

Anonymous said...

ETS rort?

Anonymous said...

Madness, sheer madness. Interesing times, or just oppressive ones?

Manolo said...

Simply put: we're being fleeced by the National government, as we were before under Labour.

Different parties, same thieves.

Manolo said...

This is John Key, the consumate liar, according to Hansard 2005:

“JOHN KEY (National—Helensville) : I rise on behalf of the National Party to give the good news to the people of New Zealand—that is, the Climate Change Response Amendment Bill is a load of rubbish and the National Party will not be supporting it, for very, very good reasons indeed.

I want to start off with a broad-ranging discussion, if I may, around the Kyoto Protocol and the absolutely nonsensical road that this Government is taking New Zealand down. I know we have a Prime Minister who is very confident, and all the rest of it, but maybe she would like to step out of her office on the 9th floor and realise which planet she is on. She is on the same planet, she may be surprised to learn, as India, China—

JOHN KEY: And Mugabe, yes—and a lot of other countries out there that have ratified the Kyoto Protocol. And why would they not, because they have absolutely no requirements on them, whatsoever. Yet here we are down in New Zealand, a very little country with about 0.2 percent of the world’s emissions, putting a self-imposed straitjacket on our businesses, and waving a huge flag that says: “Foreign investment, don’t come anywhere near us. Australia is over there—the West Island. Go over there to pour your dollars in.” To the Chinese we are saying: “Come in and buy as much coal as you like from our West Coast. We’ll sell it to you and you can burn it without a carbon charge—but, by the way, to those back here in Aotearoa New Zealand we will be slapping on a carbon charge and you won’t be able to operate.”

This is a complete and utter hoax, if I may say so. The impact of the Kyoto Protocol, even if one believes in global warming—and I am somewhat suspicious of it—is that we will see billions and billions of dollars poured into fixing something that we are not even sure is a problem. Even if it is a problem, it will be delayed for about 6 years. Then it will hit the world in 2096 instead of 2102, or something like that. It will not work.

Let us have a look at the Government’s response to the Kyoto Protocol. Our friends in Australia said they do not want a bar of it. They do not want to know anything about it; neither do our friends in America. I saw George W Bush, the President of the United States of America, talking about the Kyoto Protocol on CNN one night. George Bush is not necessarily known as the most eloquent speaker in US history. He is a fairly straight shooter, but he is not necessarily seen as being one of the great orators of all time. I plugged in the TV set, turned it on, and what did I see? There, on CNN, late at night, at about 11.30, was George Bush saying that America would not be ratifying the Kyoto Protocol, because it is not good for jobs and it is not good for the American economy. I understood that. I got it. Then I saw John Howard, the Prime Minister of Australia, addressing the Australian people and saying the same thing—that it is not good for jobs and it is not good for the economy. So when I turned to New Zealand TV and found out that we not only would be ratifying the Kyoto Protocol but in fact would be the first country in the world—that is right—to be blazing a trail to put on a carbon tax, I was somewhat astounded.

Now, I should not have been quite so worried, because when we questioned the Convenor, Ministerial Group on Climate Change last week, he said not to worry. He said that the carbon charge was not a tax increase; it was a tax shift. I was beside myself, as members can imagine, because I just could not understand it.