Preparing for “Peak Oil”: towards a preliminary agenda

“In summary, the problem of the peaking of conventional world oil production is unlike any yet faced by modern industrial society. The challenges and uncertainties need to be much better understood. Technologies exist to mitigate the problem. Timely, aggressive risk management will be essential.” This quotation is from the executive summary of a major report issued in February 2005 on the peaking of world oil production. That in itself is unremarkable, but the document – which has come to be known as “The Hirsch Report” – was sponsored by the United States Department of Energy (DOE). There are all the usual disclaimers about the policy of the United States Government. Nevertheless, as early as 2003, DOE clearly decided that a sound technical analysis of the issues raised by the approach of “Peak Oil” was a job which would be worth the investment of time and money

Environmental Taxation in New Zealand: What Place Does it Have?

The 2001 Tax Review (McLeod et al, 2001) includes a timely discussion about the place of environmental taxation in New Zealand. The review’s discussion paper released on 20 June 2001 and the final report in October 2001 both devote a whole chapter to environmental taxation. This is not surprising given the current influence of the Greens in Parliament, the Kyoto Protocol and the enthusiasm of some analysts for using economic instruments to achieve environmental outcomes. In reviewing the academic case for environment taxation, it is appropriate to go back to the Pigouvian tradition, and its more recent interpretation by Coase, Tietenberg and others. At its simplest, an efficient Pigouvian tax and an effect regulation achieve the same outcome. The policy analyst is indifferent. However, given the range of real world circumstances, comparisons can be made between doing nothing, imposing a regulation, imposing a tax, implementing a tradeable permits system or some other policy instrument. Analysts are left to choose between instruments by comparing each instrument against a set of criteria. The Tax Review discussion paper took a cautious approach suggesting that eco-taxes are only appropriate when “damage of each unit of emissions is the same across the geographic area to which the tax applies; the volume of emission is measurable; and the marginal net damage of emissions is measurable”. At a regional level they are more optimistic, suggesting “eco-charges may be appropriate at a local level”. The review does see a real possibility for carbon taxes and notes there is no research available about the potential impact of methane taxes. The Tax Review discussion paper conclusions are driven by some critical assumptions. The authors place a tough standard as a requirement for any environmental tax. This requirement is not always or often met with regulations and other policy instruments. The authors are also concerned about taxes attenuating property rights at all levels of production. This is certainly an impact but it is an efficient impact. The authors suggest that double dividends result from the transfer of rents to the Crown and not productive efficiency. This assumption needs to be tested theoretically and empirically. The authors assume New Zealand should be slow to implement taxes as part of its response to the Kyoto protocol. This ignores the possibility that there may be gains from early adoption. Environmental taxation will continue to be an important political issue in this part of the world as evidenced by the current fuel tax enquiry in Australia. Despite its importance, the consideration of environmental taxation by the Tax Review Committee is unsatisfactory. Further analysis is required which considers the performance of environmental taxation against other instruments used to achieve government goals. This paper provides some history of the concept of environmental taxation as a framework for further research to address the issues raised by the Taxation Review 2001. This paper should form a basis for further work in New Zealand examining specific opportunities for environmental and resource-use taxation

New Zealand’s energy future: a review of A Sustainable Energy Future for New Zealand by 2050 and Future Currents

Not for a few decades has there been a greater level of concern about New Zealand’s longer-term energy future, and the interplay between energy issues and climate change issues. In particular, energy issues continue to vex many New Zealanders, not least those facing the prospect of new electricity transmission pylons south of Auckland, energy users worried about supply shortages over the next winter, and vehicle drivers facing another oil price increase as crude oil in world markets hovers around US$70 per barrel. At the same time, concerns about climate change are intensifying, with some arguing that New Zealand government policy advisers and ministers have failed to grasp the magnitude of this issue. Currently, advisers are exploring new climate change policy instruments, following the government’s decision to drop the carbon tax which had been scheduled for introduction in April 2007. &nbsp