Emissions trading scheme could get large tax windfall

The New Zealand government could reap an NZ$80 billion (US$61.87 billion) tax windfall from a proposed emissions trading scheme to tackle climate change, the head of state-owned coalminer Solid Energy says. Chief Executive Don Elder told MPs considering Labour’s flagship climate change bill that the windfall would come if the international price of carbon credits — traded to offset emissions by petrol companies, power stations and other polluters — reached levels predicted by some. But Climate Change Minister David Parker rejected the NZ$80 billion (US$61.87 billion) claim, saying it was based on a “fantastical scenario” that assumed people would not generate fewer greenhouse gases if the price increased. Elder told Parliament’s Finance and Expenditure Committee that the government’s projections for the scheme included a NZ$500 million (US$386.66 million) windfall in 2013, when it applied to all sectors, rising to about NZ$2 billion (US$1.5 billion) in 2025. Solid Energy was one of several major industry players to speak against the bill. (May 9, 2008)