KEY POINTS:
The case for instituting a small carbon tax while the nuts and bolts of the Government's proposed emissions trading scheme are worked through is gaining currency in business circles.
The theory goes the proceeds of such a tax - a kind of "green money-go-round", if you will - would be diverted to a raft of projects that would reduce greenhouse gas emissions.
Some business organisations believe the tax should be revenue neutral and offset through direct personal and company tax cuts.
It's a theory I have some sympathy for, given the lack of time the select committee studying the emissions trading scheme has to deal with all the complexities of this fundamental shift in New Zealand's economic settings in a rational way with a general election pending.
Rather than produce another "camel", which will have to be reworked later, politicians should expend the time to get the scheme right but use an interim tax to start to shift behaviour.
Internationally, carbon markets are going through a rough patch.
According to the World Bank in its The State and Trends of the Carbon Market 2008 report, the carbon trading market, now at US$64 billion ($83b), is not growing fast enough to meet Kyoto Protocol commitments.
These problems may be transitional in nature or more fundamental. Only time will tell.
It's hard to see either major party - particularly Labour - going into an election promising, in effect, to raise the prices of petrol or power further by putting on a carbon tax.
But if a grand coalition is formed by the two major parties, this could result.
Such a tax may not present a major double whammy for consumers hit by mounting costs - the excuse used by Prime Minister Helen Clark when she decided on a two-year delay to the proposal to bring transport into the proposed emissions trading scheme.
It does not have to be a large impost - only enough to send signals until the emissions trading scheme comes in.
Clark has seen what happened to her Labour buddies in the UK, where, in recent council elections, Gordon Brown's party arguably fell victim to voter wrath over increases in "green taxation".
A poll in the Independent revealed more than seven-in-10 voters insist they will not be paying higher taxes to combat climate change, and that two-thirds of Britons think the entire green agenda has been hijacked as a ploy to increase taxes.
All a bit depressing really, given the scenarios from the International Panel on Climate Change on just what's in store for the inhabitants of this planet if action is not taken.
Last week, Clark bowed to her own economic reality and signalled major delays to the introduction of several aspects of the emissions trading scheme.
New Zealanders still agree with the proposition that climate change or global warming due to the greenhouse effect is a problem.
But the idealism that has seen many agree with the proposition that New Zealand should be a global leader melts when the question is asked, "Who should pick up the tab?"
The latest ShapeNZ polls was released by the New Zealand Business Council for Sustainable Development on Friday. Raw data from the survey on New Kiwis' views on emissions trading and fuel tax policy changes showed the following:
Forty-six per cent either agreed or strongly agreed with the decision to delay the phase out of emissions credits for the exposed sectors (heavy industry and agriculture) to 2018-2030.
Fifty-eight per cent either agreed or strongly agreed with the Government's rationale for postponing the entry of transport fuels, such as petrol and diesel into the emissions trading scheme from 2009-2011.
Fifty per cent agreed with the Government's decision to require regional councils to phase in any regional fuel taxes and not allow them to impose a maximum 10c per litre tax at once.
When respondents were effectively asked who should pick up the tab for any policy changes, 49 per cent thought it would result in the cost being paid by all taxpayers, and a roughly similar number thought the emitters should pick up the tab for the excess under the first Kyoto commitment period (2008-2012).
This result hardly computes with the 67 per cent who thought New Zealand emitters should be given extra credits to protect them from overseas competitors, with 38 per cent saying the protection should extend until competitors pay a carbon price.
The Kyoto Protocol limits emissions to percentage changes from a 1990 baseline.
In New Zealand's case, the taxpayer liability for the first period now sits as just under $500 million.
Businesses - and consumers - will ultimately foot a Kyoto bill. A short-term carbon tax will not remove the risk, but it may stop the bill increasing again.
