Ok, first off, I’m sorry I haven’t done a post-budget thing for a Green’s alternative budget yet – it will come, I’ve just been really really busy.
Second, this talk on the ETS is irritating me. And it isn’t because of the description of what it will do to prices – this is true, the price of stuff that uses carbon will go up when you put a price on carbon. The problem is the “frame” its being put into, which ignores trade-offs. Here is the frame:
What is it?: A market-based approach to reducing greenhouse gas emissions. Emissions units, or carbon credits, are traded between participants.
People see this and then they say “global warming isn’t real” or “we are too small to impact on global warming” and then they say “NO ETS!”. However, this isn’t the point of the ETS.
The ETS is a scheme to raise the funds to pay for our Kyoto Liability. Even if you don’t believe in global warming, we have a liability that is based on carbon emissions. As a nation, either people who produce the carbon pay for it – or everyone pays for it through higher taxes.
So here in lies the question – do we want higher prices for carbon goods or lower incomes because of higher taxes? Given that the liability is a function of the amount of carbon we produce, it follows that pricing carbon on the basis of this will lead to the “best” solution – no matter what political party you support. I know that National, Labour, and the Greens all understand this – so if you guys could like, explain it to the ACT party, and then like, explain it to the public, I’ll be very happy 😀
Update: Fuller points discussing the arguments around this in more detail in this comment. Amazed at the strength of feeling around the ETS when all the impact studies suggest that the costs aren’t nearly as substantial as many other policies that are out and about …