The Labour Party's ETS was soon due to come into force--hence the rush to amend and further weaken, what many viewed as an already inadequate scheme. The revised scheme will subsidize polluters to a greater extent during a transition period under the pretext of protecting jobs. The Tiwai Point aluminium smelter is one of the country's main emitters, and Kent Dunston, a carbon market specialist says, that this company's subsidy will cost $209 million a year.
"We keep hearing that it's jobs, jobs, jobs, but nobody is asking the question about the cost of those jobs. It would be cheaper to for the New Zealand taxpayer to pay every single Tiwai Point worker and contractor $200,000 per annum for the rest of their lives to simply stay at home".
Kent Dunston said he did the numbers after hearing Climate Change Issues Minister Nick Smith say during his road-show that the subsidies were needed. "Anybody with access to the Internet and a pocket calculator could have performed the same calculation, and I'm astounded that nobody has." Based on a formula of 1.9 tonnes of carbon dioxide for every tonne of the 330 kilo tonnes of finished aluminum the smelter produces each year, the plant has an emission profile of 627,000 tonnes per annum."
"At the proposed capped price of NZ$25 per tonne, these emissions represent a liability to the smelter's owners of $15.675 million per annum. Under the proposed changes to the ETS, 90% of the emission units would be given to the smelter free of charge, subsidising it's operations by$14.13 million per annum courtesy of the New Zealand taxpayer."
Kent Duston said that the plant's emissions level was artificially low because it already received subsidised electricity from the Manapouri hydro power scheme. "If this electricity were to be diverted to the national grid, the 850 MW produced by Manapouri would be sufficient to decommission the coal-burning Huntly power station, which produces up to 15% of New Zealand's electricity."
