The National Party's pre-election pledge to keep amendments to the emissions trading scheme fiscally neutral has been blown out of the water by the changes proposed in the Climate Change (Emissions Trading and Other Matters) Amendment Bill.
New Zealand Sustainability Council executive director Simon Terry has released new calculations, based on data released under the Official Information Act, to show New Zealand will not only add greatly to its carbon emissions deficit by 2020, but is on track for a massive blow-out by 2050.
The outlook, if realised, has the potential to cost future generations of taxpayers billions of dollars and is exacerbated by the indefinite extension of transitional arrangements that shield large emitters from their carbon costs and give no date for including the agriculture sector in the scheme.
New Zealand has pledged to lower its greenhouse gas emissions by 50 percent from 1990 levels by 2050, but instead could be more than 140 percent above that level on current trends, with New Zealand's carbon liability rising dramatically late this decade.
"During the 2020s, an average of more than $2 billion a year would need to be paid to overseas parties in order for New Zealand to meet the obligations its targets require," based on a carbon price of $25 a tonne," Mr Terry said.
For the first four years of the Kyoto Protocol, 2008-12, New Zealand was 51 million tonnes in deficit, worth $1.3b at the $25 per tonne upper limit imposed under the ETS transitional arrangements, with around 80 percent of that liability to be transferred as a bill to future taxpayers, he said.
"If the legislation is changed and the new concessionary arrangements are not terminated before 2020, the consolidated taxpayer position will be minus 94 million tonnes," the Carbon Budget Deficit report says.
"That is a sacrifice by the taxpayer of $2.3 billion or more at $25 a tonne."
NZN