| ETS is not going to work |
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| By John Northcott |
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Years ago, someone had the idea of selling shares in his company to raise capital and, incidentally, give others the chance to share in his success (or failure).
Whatever it was, the shares could all be easily traced back to something tangible: oranges, ships, marmalade or jam jars. Then someone had the terrible idea of forming a company
which didn't actually deal in something you could see or hold in your hand. His company bought and sold shares in other companies. And, often, those companies also bought and sold shares
and owned shares in each other. And that is, I
believe, the cause of most of our current economic woes. Which is more than can be said for the Emissions Trading Scheme. It'll be trading in Carbon Credits. Show me a Carbon Credit. Let me hold it in my hand as I could an orange. Carbon Credits are calculated by the people who initially worked out that New Zealand would have
a surplus and could get rich selling it. They got it wrong, though; we have a awful deficit. Well
that's the current calculation, or should I say, "guesstimate" or just plain "guess"? At least you can weigh wool. Most of our trading will be based on someone's guess as to how often a cow farts. And on the subject of cows: I never thought I'd feel sorry for cow cockies (Queen Street battery farmers excepted). Here they are, making a large proportion of this country's overseas earnings in what was, until recently, seen as a clean, green way. Now they're painted as villains in the climate change saga. Granted, they could do more to reduce water pollution but, as far as, greenhouse gasses are concerned, that's how nature made cows. What are they supposed to do? Give up dairy farming? Buy corks? Until science comes up with an answer, why not leave them alone? But science is unlikely to come up with an answer unless the government invests more in research. The insanity doesn't stop there, though. If you're a "carbon emitter" you'll have to buy carbon credits from someone who has a surplus. Then you can put up your prices, just like all the other emitters, and go on polluting. We, the consumers, will have no choice but to pay, because everyone will have raised their prices. Of course, a jam jar maker will have no skills in carbon trading. But, fear not, someone will do it all for him and skim something off the top for his trouble. And now we come to the real insanity: there will be no decrease in pollution because there will be no incentive to decrease it. In fact, the organization with the surplus will be able to afford to diversify and become a polluter too! It won't take long for trading in Carbon Credits to become the sole business of some companies. They won't be pumping out carbon or getting rid of it, just buying and selling. We've already seen what that does on the share market: the share price of some companies bears absolutely no relation to the actual worth of those companies. The same will happen with Carbon Credits. Let's extend the idea to Speed Trading. A little old lady who never drives faster than 80kph could sell her surplus 20kph to a boy racer so he could hoon at 120kph. How about Porridge Trading? I'm a good boy; I've never been to prison so I could sell my porridge surplus to someone about to go inside. He wouldn't get banged up and I'd be rewarded for my virtue. (Or, at least, not getting caught.) We should send the authors of the ETS to sit at the emitting end of a cow until they come up with something sensible. Here's a start: have factory owners live downwind from their factories. Let them get their drinking water downstream. Put a tax on avoidable pollution; then, perhaps, we could afford half way decent health and education systems. Well, those are my ideas, anyway; but I'm not clever, I didn't dream up the ETS. John Northcott |
He may have been, for example, shipping oranges or turning them into marmalade or making the jars to put the marmalade in.