The Government's climate change proposals yesterday are marred by a decision to nationalise the property rights (and liabilities) created by the Kyoto Protocol. If the international agreement ever comes into force it will set up a market in carbon credits that can be traded between polluters and those who plant
<i>Editorial:</i> Climate regime flawed
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In other respects, too, the decisions announced yesterday were something of a backdown for would-be champions of greenhouse containment. The Government has heeded the concerns of business and provided for carbon tax concessions for industries or sectors that might be in difficulty if their emissions were fully taxed. And forestry, as mentioned, will not suffer the consequences of reduced planting.
So the burden of carbon tax, if it ever happens - the Government has put it off to at least 2007 - would fall on small business and households. Voters may have something to say about that at the election of 2005, if not before. But if global warming is the problem that an international panel of climatologists suspects it might be, and if there is anything that can usefully be done about it, a carbon tax is probably inescapable.
Care must be taken, however, to see that taxes and carbon credits do not unduly distort the economic picture. Taxes should be applied without favour and the credits traded between companies rather than states. Yesterday's proposals would cushion New Zealand's main offenders from the costs of their pollution and give the Government control of environmental investments that ought to be left to Kyoto's intended market.
Intergovernmental Panel on Climate Change (IPCC)
United Nations Environment Program
World Meteorological Organisation
Framework Convention on Climate Change
Executive summary: Climate change impacts on NZ
IPCC Summary: Climate Change 2001