Media release: Strong support for the ETS to get us to Net Zero
Wellington (Wednesday, 28 September 2022) – New Zealand’s economists strongly support the Emissions Trading Scheme and strengthening it through a carbon dividend.
The latest survey of members of the New Zealand Association of Economists finds extraordinarily strong agreement that:
- Tightening the ETS’s cap on emissions makes far more sense than measures like fuel economy standards on imported vehicles (53% strongly agree, 35% agree, 5% disagree);
- If additional market failures are present, policies should target those directly to reduce the cost of mitigating emissions (24% strongly agree, 57% agree, 2% strongly disagree);
- A carbon dividend to households beats measures like electric vehicle subsidies or targeted regulations for ensuring equity (45% strongly agree; 48% agree; 2% disagree).
The New Zealand Initiative’s Chief Economist, Dr Eric Crampton, warmly welcomed the survey results.
He said, “The survey results reflect exactly what the Initiative has been arguing for years. The ETS provides our best way of getting to net zero.”
“Complementary policies can make it easier for the ETS to do its job by addressing other market failures, but they should not try to reduce emissions directly. Programmes like EECA’s GIDI subsidy scheme and feebates on vehicle imports are economic nonsense and hinder our climate response.”
“The government earns enough at ETS auction to provide every family of four with a carbon dividend of about $1,200. Support for a carbon dividend, which the Initiative was first to advocate in New Zealand, is almost unanimous among economists. The Minister of Finance should stop using ETS auction revenues as a political slush fund and give it back to Kiwi households.”
New Zealand Initiative Executive Director Dr Oliver Hartwich added, “New Zealand has a world-leading ETS. But politicians, and too often even the Climate Commission itself, seem determined to undermine it through measures like discounting forestry credits. This kind of sabotage puts our net zero target at risk.”
Dr Crampton concluded, “For years, advocates of measures like feebate schemes and industrial subsidies, which cannot reduce net emissions because of how the ETS works, have insisted that opponents are either ideologically motivated, or do not support net zero. But the overwhelming majority of economists, whether general members of the New Zealand Association of Economists, or members of the Expert Economists’ panel, agree that the ETS is the best way of getting to Net Zero.”
“It’s high time that climate policy started taking net zero seriously.”
NZAE survey results and graphs are available here.
The prior New Zealand Expert Economists’ Survey results are available here.
Dr Oliver Hartwich and Dr Eric Crampton are available for comment. To schedule an interview, please contact:
Amanda Boyd, Marketing & Communications Manager
P: 04 494 9109