Robin Loomes
Since: Aug 2007
Posts: 12
The ETS legislation has not been thought out properly (the Finance and Expenditure Committee recommended over 1,000 amendments) and would be likely to have harmful unintended consequences as a result of its complex and far-reaching nature.
The Climate Change Minister has acknowledged this problem, saying that �complementary policies� would be required to minimise any harmful effects. His assurances are unconvincing given the findings of a report issued in July by Australia�s national science agency, CSIRO, warning that petrol could reach $A8 per litre by 2018. At the current exchange rate, this implies a price approaching $10 per litre in New Zealand.
Any significant and sustained rise in the price of liquid fuels would have huge repercussions. For example:
1.How many low-income families could afford a car that cost say $400 to fill it up with petrol? How would businesses operate in such an environment?
2.Infrastructure projects would have to be re-evaluated. Funds intended for the building of new roads and the upgrading of existing ones would have to be replaced by substantial investments in public transport.
3.There would be a greater reliance on other forms of energy such as electricity, especially once electric cars appearance on our roads. The annual demand for electricity in NZ is already increasing at a faster rate than our population. What does that imply about the future price of electricity?
4.Some industries would be devastated. Consider tourism. Fewer foreigners could afford to come here. What would happen to all those wokers in the hospitality industry who currently rely on tourists for their livelihoods?
5.NZ cities are very spread out. The organisations that make up civil society typically have memberships that are spread over large geographical areas? How would they survive?
Of course, the price of liquid fuels is only part of the story. Petrochemicals are also obtained from crude oil, and are used to manufacture plastics. According to Statistics NZ, this country imports about 250,000 tonnes of plastic polymers each year. In the last year, the average price of about $US1,850 a tonne has increased 40% on average, depending on the type of plastic. We would see commensurate rises in everything made of plastic if the rising price of crude oil pushed petrol toward $NZ10 per litre.
The developing scenario outlined above would transform our economy and society. It would propel NZers away from their current heavy reliance on oil and oil-based products and toward suitable sustitutes. This adjustment process would certainly be painful. The pain would be even worse if Parliament was to pass an ill-conceived Emissions Trading Scheme that added another layer of bureaucratically inspired charges that undermined everyone's ability to survive in an increasingly hostile environment.
The NZ Government might have the best of intentions, but it could never hope to fully compensate NZers for the harmful effects of the proposed ETS if the price of crude oil increases significantly.
