Yesterday, in the Herald ($), I challenged Climate Change Minister James Shaw to explain how his Emissions Reduction Plan lowers emissions.
In this post, I want to head off what he is going to say. His lines are, frankly, not right. So let’s get that on the table and go through the argument before he says it.
Shaw’s plan is vast. It covers every sector of the economy. The government could regulator, tax or subsidise anything or everything in the name of reducing emissions.
Shaw’s plan is not going to reduce emissions.* The government has already placed a sinking lid on emissions with the ETS. It is widely accepted that cap-and-trade schemes neutralise other emissions policies. If the cap determines total emissions, policies under the cap do not.
This neutralising effect of an emissions cap is called “the waterbed effect”.
Here is how a cap-and-trade scheme…
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Utopia, you are standing in it! 
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