Oil & Gas Policy - What to expect from Drips

We all want carbon emissions reduced and fast – well all of us apart from the few Neanderthals that have an ideological opposition to the science of human-induced climate change.

But the Green Party-sponsored ban on oil and gas exploration is about the most dumbed-down, ineffective intervention that it is possible to come up with. it pays no regard to collateral damage to New Zealand and fails on all fronts apart from the justifiable claim that it is virtue-signalling, a “look-at-me I really care” declaration of nothing.

The Greens have a dogmatic opposition to using market-based mechanisms and have demonstrated further levels of economic illiteracy with this blanket ban on exploration. It is dumber than dumb for the simple reason that their far left ideology allows no room for economic efficiency.

The clever way to deal with carbon emissions is to price them and then allow the most efficient emitters of carbon to be the last to survive. Similarly with fresh water – price it and allow the market to operate. That way the most wasteful processes are the first to be closed down – or improved.

The ban on exploration will do nothing to the global supply of fossil fuels. New Zealand is such a minuscule source that the global price will be unaffected. Our sales will simply be replaced by the next most expensive source – it too will be minuscule in the global context. The only economic impact I can see is that New Zealand producers of fossil fuels will be denied that opportunity. Too bad Taranaki.

There will be however – in our own minds if nowhere else – a fair dollop of self-congratulatory satisfaction in our belief that we’re showing the world the way forward. It’s laughable to anyone who’s not in that coterie of Far Left Kiwi Greenies, but nevertheless the smug satisfaction from having dealt a blow to the business pariahs that trade oil and gas will be enough.

Be there no mistake – all of the harm will be felt by New Zealand. And where’s the benefit? Apart from the gratuitous satisfaction there is none – certainly nothing economic.

What a waste of effort. New Zealand could have made a long overdue advance on emissions by simply pricing carbon properly through setting quantitative targets for reducing emissions and using a market mechanism to ensure they’re met. It’s called an emissions-trading-scheme and it should never have been corrupted by the National Party all those years ago when they got re-elected.

This effort from the Left to do anything meaningful about New Zealand’s contributions to global emissions is pathetic, so far away from evidence-informed policy that it deserves all the derision it gets. Unless Labour is going to insist that the Far Left Greens adopt market mechanisms to further their environmental objectives, New Zealand has little to look forward to from this coalition by a reduction in well-being from poorly constructed policy.

 

Gareth Morgan

Gareth@top.org.nz


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