What price conservation?

The idea of user-pays conservation is untenable to many people. However, access to New Zealand’s conservation estate already includes a level of user-pays. Tourism operators pay concessions to access Department of Conservation (DOC) land, which they recover by charging their customers. Trampers pay for the use of DOC huts and camp sites, although these facilities are often heavily subsidised from the public purse. But the majority of trampers, hunters, mountain bikers, and other eco-tourists or adventure seekers do not pay directly for the use of the conservation estate.

Congested Thinking about Congestion Charging

The Dominion Post of Friday 18 April had a front page article on congestion charging for the Wellington region at peak commuting times. Congestion charges have much theoretical merit, but the conditions under which they deliver are beneficial are not that easy to assess. As I read through the article I became progressively more concerned about the proposed scheme. Let’s start by looking at those aspects of the proposed scheme that really are complete rubbish.

No “right” response to global warming

The mainstream acceptance of both the scientific consensus on global warming and the need for a globally binding cap on carbon emissions does not by itself indicate that we are close to reaching a satisfactory solution to climate change. The optimal policy response is still subject to massive uncertainty from three sources: risk around our central forecast of climate change costs, uncertainty about the cost of reducing emissions, and uncertainty about how we should share the cost burden.

An array of carbon prices

Last week my colleague Gareth Kiernan discussed the importance of what economists call allocative efficiency – ensuring that the nation’s resources can flow into those activities where they are most valued. A pre-requisite to achieving such an outcome is clear and consistent price signals. An area where pricing is rapidly becoming neither clear nor consistent is carbon pricing.

What will the emissions trading scheme cost?

As speculated some weeks ago, the government has decided to introduce a price on carbon emissions in the form of an emissions trading system (ETS), rather than via a carbon tax. Whilst involving higher transactions costs than a tax, especially with some industries receiving free allocations of emission rights (the right to emit greenhouse gases for free), the ETS does at least involve all industries in the economy – eventually.