Petrol Tax Increase and Solar Power Feed-in Tariffs


It’s election year next year and the National Government has announced petrol tax increases to start in July this year. Now I don’t have a problem in principle with user pays, although after the report by the Ministry of Transport earlier this year, it doesn’t look like things are going to improve, in fact we are likely to see mid day traffic congestion (don’t we already have that?) in Auckland, as well as the morning and evening commutes.

Long BayThere doesn’t seem to be a lot of encouragement for people to work from home although that would ease the pressure on congestion. Auckland Council seems dead set on high rise housing in the Auckland Unitary Plan, but at the same time they are building new homes in areas like Long Bay as quickly as they can, with no sign of increased road capacity for the 2500+ homes to be built. Don’t get me wrong, I’m not against high rise as long as it is done smartly, without taking sun away from existing properties and it is part of an environment which includes amenities that encourage people to work, live and play in a safe healthy environment.

Wouldn’t it be great if those homes all had solar panels on their roofs and were able to sell excess power back to the power companies. Even better if they could get interest free loans to cover the cost. This last long hot summer would have been able to generate massive amounts of power for water heating etc. It’s funny that when I built a minor dwelling next to my last home, I had to install an ugly water tank to capture rainwater and allow it to trickle into the stormwater system from the roof, which I could of course also use for the garden, but there were no options with regard to using renewable energy.

I was listening to the Peggy Smedley Show podcasts as I do each week and she recently interviewed Nick Bitterswyk CEO of Urban Green Energy, who mentioned that great things were happening in areas like solar power in Australia and New Zealand. He was right about Australia, which is going gangbusters with finance and feed-in tariffs, but clean and green New Zealand is not. We do not walk the talk when it comes to renewable energy as you can see on the web site at EECA.

At a recent home show I visited every exhibit where they were selling domestic solar power solutions and asked about the ability to sell surplus power back to power companies. They said that it was not happening, that the utility companies were not supportive or interested. They said that they and the Government have their own agendas when it comes to power generation.

Now we have a large reliance on hydro and geothermal power. Much of our power in the North Island comes from geothermal power sources in the Taupo region, such as Wairakei. I wonder what would happen if we had a major eruption and this source of power dried up. What would our back up plan be? What if we had another drought similar to the one we had this summer and the lakes were too low to provide sufficient energy. You can’t suddenly roll out a solar energy plan at the last minute.

I urge Kiwis to consider solar power and feed-in tariffs when thinking of who to vote for next year in our national elections. This is not a new topic, I have blogged about it several times. If a disaster happens, will the Government say they could not have foreseen this situation? I don’t think so, it is a choice. I’m hoping that at least the Green Party will think about this as part of their election manifesto. Actually where are the Greens? They do appear to have a policy on feed-in tariffs, but its pretty hard to find.

So if you were able to get an interest free loan to put solar panels on your home and the ability to use that power when you needed to and were able to sell power back to the grid for a rebate at fair market pricing, would you take advantage of it? I welcome your comments.

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Proposed carbon tax for new and used car imports into New Zealand


I was surprised to read this one in the Herald this morning, where the Government is considering a levy on all car imports coming into New Zealand, based on their CO2 emissions. According to National’s finance spokesman Bill English, this could add $10,000 to a Holden Commodore based on $150 per gram of CO2 emitted per kilometre travelled, above the standard of 214g CO2/km.

Sound like more revenue gathering to you? It does to me. They want levy’s on our petrol, they are going to build PPP toll roads (as long as there are alternatives I don’t have a problem with this one) and as always are very innovative in taking back any income tax reductions that they offer us in other ways.

If they do this, have no doubt that this will affect you, just as their engineering of interest rates has affected the whole economy and is driving some people out of their homes. The thing is that people are already straining the public transport systems a increased fuel costs bite into their home budgets forcing them to leave their cars at home.

Yesterday, on my way back from visiting some car manufacturers (ironically), I had to turn off my air vents because a bus was blowing great plumes of smelly diesel smoke right into my car’s air con system. A little further on the motorway I got stuck behind one of those Japanese import refrigerated trucks that was likewise blowing exhaust soot at me. The back of the truck was almost black from soot that has come out of its exhaust. I’m not sure I’d be keen to buy the food he was transporting.

So here’s the thing. Instead of taxing vehicles as they come into the country and penalise everyone indiscriminately (and yes I do understand that CO2 is not the same as the soot smoke I was complaining about), why not tax all cars at the time of Warrant of Fitness testing for the percentage of pollutants they have control over. Make the owners of smoky, sooty, poorly tuned cars pay the levy, or just like any other warrant failure, go back to the garage, get their car correctly tuned and go back for another try.

It seem to me that, because many countries already have stringent motor vehicle emission standards, the quality of the exhaust output on new cars is going to continuosly improve. It’s the cars, vans, trucks and buses that we have here already that are the problem and if we cause enough pain for those vehicles to be tuned up, a lot of the problems will go away.

The Government is very keen on users pay, so make the real polluters pay, not just a blanket levy on every vehicle that comes into our country. It’s very simple really. It’s transparent and the Government will not be opening themselves up to complaints of revenue gathering. It would be far more consistent with their user pay policies and their claims that they want to reduce pollution by bringing in these levy’s.

As a footnote, a question for someone. Do the bus companies have their own testing station and produce their own Warrants of Fitness? How is it that there are so many smelly buses on the road puffing great clouds of black smoke at pedestrians and cars behind them. Why do people have to hold their breath as these buses go past. How do they get away with it?

New Zealand Carbon Taxes and Carbon Trading


I sometimes wonder about this country. First of all we told the world that we were clean and green and carbon friendly, so we signed the Kyoto Protocol as a sign of good faith. Our government likes to set a good example and we are very PC (politically correct) so we led the way. Of course we noted that countries like the United States, China and other major polluters didn’t sign, possibly because they uderstood the implications better than our politicians did. I believe even Australia didn’t join the party.

Then we started looking inward and understanding the implications and in the last year we have seen dramatic changes in the way we look at ourselves, much of it very good. Business and consumers have been given lots of opportunities to measure their carbon footprint and look at ways that we can recycle and in other ways try to become carbon neutral.

I understand that one of the Agreements we have signed allows us to only have to worry about the increase in carbon emissions since 1999. Now I’m not a specialist in this area and not so much interested in the finer details. I’m happy wherever possible to do my bit as a consumer and in business. I have been recycling and separating paper waste, plastic, metals and glass from my household waste and do the same in the office wherever practicable.

I was surprised to learn recently that even though as a country we are separating waste into various categories much of it is still dumped and not recycled, but that’s another story.

I don’t have a major issue with carbon trading within business in our country, for those who wish to partake, but for many small businesses that it is a problem, yet another compliance issue that makes it difficult for businesses to focus on generating revenue and hopefully profit. This has the potential to damage many industries in New Zealand.

What really bugs me though is that even though we have loads of native bush and domestic forestry and are largely an agrcicultural nation, we will apparently still have to buy carbon credits from other countries who have a better carbon footprint. I wouldn’t have too much of a problem with this if it applied to the entire developed world, but when giant countries who have huge large scale industrialisation and generate mass pollution, greenhouse gases etc don’t and don’t have to participate, this situation is unfair.

I accept that the world can’t go on as it is and that the future landscape for our children and grandchildren looks bleak. I accept that we have to take responsibility and I believe that most New Zealanders do. Even industry such as the Comalco aluminium smelter in Invercargill which could close down due to the proposed carbon taxes claims to be the greenest of the 200 off smelters around the world. If they close due to our governments obsession of being the best example in the world, they will take away 3,000 direct and indirect jobs which in an area of only around 50,000 people could be enough to close the city down economically.

The government want us to pay carbon tax on our petrol which is already up at the highest level it has ever been per litre, as well as adding regional taxes to pay for roading developments, public transport improvements, when traditionally the taxes we pay in this area go to the consolidated fund to be used on whatever they deem important. Fortunately there is a moratorium on this for 2 years, I wonder if there is any relevance to this being an election year. Then instead of using those taxes to improve our country’s carbon footprint, we have to buy tax credits from other countries and then on top of that again, they will want us to spend even more money on trying to become carbon neutral.

All of this in a climate (pardon the pun) where house prices are higher than they have ever been, food prices are going through the roof, interest rates are high, in short the cost of living is far exceding the average income earners pay increases and businesses in the finance industry are falling over. I could go on, but if you live here you know what I am talking about. We don’t have enough money to support our stretched resources in health and many children are going to school without breakfast in our working class areas.

So for all of that, instead of taking carbon taxes and investing them in our own country to improve our sustainability, our government wants to send the money to other countries. I applaud the government for drawing our attention to the environment, to our responsibility to its health and to future generations. But surely the money would be better spent at home? If the rules are not the same and enforcable for the whole developed world, then lets make our home a better place and set the example. We can’t afford to give money to other countries who are ‘greener’ than us, because it sets a good example. Let’s tidy up our own back yard and become sustainable and then say to China and the USA and anyone else that isn’t doing their bit, ‘follow our example’.

Carbon Tax on petrol, yet another great idea?


get-in.jpgThe New Zealand Government has once again raised the prospect of a Carbon Tax on Petrol, rated as 7 cents in the litre. The concept I gues is based on a user pays scenario, so the more you drive, the more carbon you burn. Given that in most parts of New Zealand our public transport systems are pretty substandard, it looks like most of us will pay the price.

They have talked for a long time about measuring exhaust emissions and setting levels below which you can’t pass your Warrant of Fitness tests, but that still hasn’t come in. Of course that doesn’t generate significant revenue and the NZ Government has just announced a significant budget deficit, not that these 2 things are in any way related. I’ve also noticed that many of the ‘greenies’ drive diesel cars that blow black smoke and are often covered with soot, as are many of the buses I follow on the motorways. I suspect that the black soot on the bus I saw recently covering an advertisement on the back of a bus which said “we are drivers too” is a carbon waste product.

Currently, according to Caltex NZ, 41.6% of the price we pay for petrol in NZ is tax, so why not just round it up to an even 50%? The story was good though and I was impressed with Caltex’s excellent suggestions on how to use less fuel, some of them are very good. I suspect though that most people will continue their normal lifestyle. It’s like the old story of putting a frog in a pot of warm water and bringing it to boil slowly. We still love our big cars and we want to enjoy the great outdoors which is why many of us love in New Zealand.

The thing that amazes me is that we are still so slow with introducing alternative fuel engines. Toyota and Honda have done very well with Hybrid engines and they can’t seem to get enough to meet demand. Maybe the government should do something to encourage these vehicles and lower the import taxes on them. It’s yet another example of why the things that are good for you cost so much more. Give businesses in the cities an incetive to buy Smart Cars, but of course we have a problem with renewable energy as well, especially after a long dry summer. But wait, what about solar power? This is another tangent, but I read a couple of years ago about people in the USA getting major rebates for installing solar energy in their homes, plus the ability to sell their surplus power into the grid. We have certainly had more than enough sun this year, well actually I wouldn’t mind if it lasted all year round, but the point is we aren’t harnessing it and we aren’t offering people an incentive to help with the cost of making it happen.

So, we continue to encourage the use of fossil fuels (yes I know we are starting to include small amounts of biofuel into the mix, but all that will do at this stage is allow the oil to last a little longer. We know oil is a finite resource and once we have run out and the Middle East has caved in, what then? My prediction based on current consumption is that fuel will become incredibally scarce, travel and tourism will become incredibly expensive and this could have a disastrous effect on economies like ours.

So lets see what happens. Petrol prices go up because of oil scarcity, whether through resource depletion or through wars and terrorism. Oil prices also go up because of carbon taxes as oil companies have to buy carbon credits to meet their obligations. Taxes go up because they are based on a percentage of the price, whether through excise, GST, carbon, road user and others. The cost of living goes up because this impacts on everything we do, all goods and services involve transport. Domestic tourism and entertainment will suffer as people decide it costs to much to go anywhere. We all become a nation of obese couch potatoes because it’s cheaper to sit at home to watch sport or cable TV instead of going out and getting some exercise.

One day it will be too prohibitive to go anywhere except for special occassions and we will we end up living virtual lives, never leaving our homes at all.

Actually I wouldn’t mind the carbon tax if it was used on R & D for alteratives, for incentives for people to develop and commercialise alternative fuels and engines to run on them. The whole concept of carbon taxes seems to be punitive instead of constructive. What happened to Kiwi innovation? We’re still patting ourselves on the backs for inventing number 8 fencing wire, Hamilton jets and bungee jumping. Let’s pay people for coming up with new renewable energy resources instead of punishing people for using the only resources they have available to them, there’s a novel idea? There might even be international carbon credits in it.