The plan to put a price on carbon emissions needs to change or it will require ordinary consumers to pay for protection of farmers’ capital gains and fail to cut the nation’s emissions.

The simplest way to understand the Government’s central response to climate change is to think in terms of protection money.

The Emissions Trading Scheme (ETS) starts in the right place – setting up a mechanism to put a price on ‘carbon’.

Such a price signals the cost of emissions to the environment, encourages low carbon alternatives, and has the capacity to reduce emissions. Climate Protection Money is the other benefit, as pricing also brings in funds to meet the nation’s Kyoto commitments.

New Zealand’s gross emissions are expected to be 28% over its Kyoto Protocol target without intervention. To square away this excess and do its bit for climate protection, New Zealand will buy carbon credits from overseas and the ETS will ensure local forest owners who remove carbon from the atmosphere also get paid.

So far so good. Now for the problems.

Read the full article here: A Climate For Protection Money

This article first appeared in a modified form in the NZ Herald.