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Climate change has divided New Zealand politics for two decades or more, but the morning after the Climate Change Commission unveiled the most significant set of emission reduction policies to grace mainstream politics, there was little sign of political discord. serious.
Prominent breakfast TV host Duncan Garner even asked Climate Change Minister James Shaw to continue offering cheaper electric cars to Kiwis.
“How big will the incentives be for us to buy an electric car? You give us a great incentive [and] We will go and do it, ”Garner said.
“You’ve been telling us that for a while, Duncan – it’s on its way,” Shaw replied.
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Shaw aired Monday morning and said the biggest challenge facing the country when it comes to reducing emissions would be striking the right balance between the changes that each industry is being asked to do.
The debate centered on a policy that the government had tried to implement in its first term: a plan to make clean electric and gasoline cars cheaper by subsidizing their initial costs with a tax on the most polluting cars.
The policy is called feebate, with the “fee” being the tax on polluting cars and the “bat” being a refund that consumers get if they buy cleaner alternatives. In 2019, the government consulted on a plan that would have made clean cars up to $ 8,000 cheaper, while polluting cars would have been $ 3,000 more expensive.
National denounced the plan as a “car tax,” and in 2020, the government dropped the policy after failing to gain support from NZ First. While the Greens brought politics to the election, the Labor Party quietly dismissed it from its manifesto.
But Labor’s position changed after the election with Transport Minister Michael Wood last week saying the government “will consider options for an incentive scheme to help Kiwis switch to clean cars.”
Phil Walter / Getty Images
The Chairman of the Climate Change Commission, Dr. Rod Carr, and the Minister of Climate Change, James Shaw, discussed the Government’s proposals on climate change.
What that means is an open question. The first emissions budget of the Climate Change Commission suggested a bonus or subsidy, leaving the government to choose one option or none.
Shaw said the government had yet to comment on what kind of incentive scheme it would use.
“I couldn’t tell you at this point, the cabinet has not yet considered what those alternatives are,” Shaw told RNZ on Monday.
Officials at the Ministry of Transportation considered both a fare payment option and a direct subsidy in 2019.
The subsidy option would have given electric vehicle owners a more modest subsidy of $ 1,000 to $ 2,000, which would have cost the Crown an equally modest $ 104 million over three years. In contrast, the government has set aside $ 421 million for the screen production grant, a grant from the motion picture industry, during the same period.
The ministers ultimately opted for the feebate method: the subsidy for cleaner cars was higher, and since it was fully financed from taxes collected on polluting cars, it came at no cost to the Crown.
However, it came at a huge political cost, as the government was apparently shocked by the vociferation of opposition to the polluting car tariff.
The government is now faced with the choice of whether the cost of any incentive scheme will be borne by people who continue to buy polluting cars or by taxpayers in general.
Shaw revealed little, but further suggested that the scheme would seek incentives to reduce the initial cost of purchasing electric vehicles, rather than existing electric vehicle incentives that focus on reducing operating costs.
“The upfront cost is prohibitively expensive for most people, but the running cost is very, very low.
“New Zealanders typically spend more on the running costs of our cars than we need over the life of those cars because we like to spend less up front,” Shaw said.
Shaw said that, more broadly, the challenge of reducing emissions would be to ensure that each sector’s transition is managed in a fair and balanced way.
“The biggest challenge will really be to strike a balance between all the sectors of the industry that will see changes in the next few years because all the sectors will say ‘it’s too difficult, you’re going to have to push another sector harder,’” Shaw said.
Rod Carr, who chairs the Commission on Climate Change, also took to the media Monday morning to manage the expectations of the Commission’s proposals.
He told RNZ that despite calling for a ban on the importation of fossil fuel vehicles by 2032, 60 percent of light vehicles in New Zealand would still use internal combustion engines by 2035, meaning that consumers could still have in their hands one if they wanted.
He also spoke of the enormous demand this would put on our renewable electricity generation. Carr said the energy would come from new and existing sources.
“[The emissions budget] assumes that about 13 percent of the electricity currently used by aluminum smelters will be available for use by all New Zealanders, and by 2035 we will increase New Zealand’s renewable generation capacity by 170 percent, largely part, but not completely, from the wind some solar energy, ”said Carr.
As things currently stand, New Zealand will be able to use the additional renewable electricity generated for the Tiwai Point aluminum smelter once it closes in the middle of this decade.
This will release about 13 percent of the current electricity supply. But this could be a challenge if Tiwai remains open (which is unlikely, although it has threatened to close before and remains open), or if Transpower is unable to make an investment in the grid to get that energy from the southern pool. Island to other parts of the country where it will be consumed.
Carr said Transpower was already looking to bring that extra power north.
“Transpower is already investing in the first stage to bring that power north and they are developing plans to bring that power even further to the North Island,” Carr said.
Carr said it was time to accept that Tiwai Point would close.
“The smelter has indicated that it is on its way out, so the time has come to accept that this is going to happen, if in fact that energy does not become available, it means that New Zealand will have to make substantial investments sooner in the additional electricity generation, ”Carr said.
Opposition politicians have been quite quiet in their response to the Commission’s draft budget. They still have some time to formulate an answer. The Commission will only present its final opinion to the Government in March and the Government has until the end of the year to act on it.
