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Suzi Kerr’s advice to ETS select committee
Motu Senior Fellow Suzi Kerr was recently invited by the Clerk of the House to give independent specialist advice on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. She wrote the response below while on sabbatical at Stanford University, California.
The paper includes a set of comments, responses to other submissions, and responses to questions posed by members of the select committee. The author lists the following key points:
- If there is a price cap, there should be no banking of units except within forestry.
- Foresters should not be able to take advantage of the price cap.
- Detailed harmonisation with Australia is not necessary or desirable.
- Levels of free allocation in the current bill are almost certainly too high on economic grounds and for economic efficiency reasons alone should be phased out quickly regardless of how international agreements evolve. The proposed amendment exacerbates this problem.
- The form of allocation in agriculture should not be specified yet. It is not necessary to specify it and the current proposal could be damaging. If agriculture’s full entry must be deferred, a tax on nitrogen fertiliser and subsidies for nitrification inhibitors should be considered for early introduction.
It is available for public release now that the select committee process is complete.
Download Dr Kerr’s paper here.
Posted 26-Nov-2009 by Marianna Kennedy