ACT climate plan would remove carbon floor and return auction revenue to households

Summarised by Centrist

ACT’s election climate plan would do more than abolish the 2050 net-zero target. It would remove the reserve price at government carbon auctions and return all net auction revenue to households. If the revenue were too small for practical individual refunds, ACT says it would be ring-fenced for other tax relief.

ACT says carbon units have traded in the low $50s while the auction floor remained at $71, contributing to six failed auctions. 

Allowing auctions to clear lower could reduce costs embedded in petrol, power, freight and groceries. The party estimates the emissions trading scheme costs an average household about $478 a year when carbon is $55 a unit, although it has not estimated the likely household refund. That would depend on future auction prices and revenue.

There is a trade-off. The reserve is meant to stop the government adding more units when the market is already well supplied. The Climate Change Commission says lowering it could weaken investment signals and put emissions budgets at risk.

ACT would also peg New Zealand’s emissions cap to a trade-weighted average of major trading partners, restore industrial carbon assistance to earlier levels, oppose agricultural emissions pricing and change forestry rules. David Seymour says climate policy should cut emissions without exporting jobs.

The policy exposes a coalition fault line. National backs the Zero Carbon Act and Christopher Luxon has made staying in the Paris Agreement a bottom line, while ACT says New Zealand should renegotiate its commitment or be prepared to leave.

Read more at The NZ Herald | ACT policy | Climate Change Commission

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