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Pluck a kiwi , hear the hissing - the NZ carbon tax

5 May 2005
New Zealanders can be a bold and pioneering lot. From participation in the first successful ascent of Everest, leading in the Americas Cup and providing an almost limitless supply of orcs and hobbits, to reducing farm subsidies and reforming fisheries management, this small country has often provided a model that others want to follow. So what about the new tax on carbon?

This is a case where climate policy meets real hard politics, and - not surprisingly - it's kicking up a lot of dust (see New Zealand Herald, 5 May). Business assocations, opposition political parties and others make dire and terrible noises about grave damage to the economy and alienation of two of the country's more powerful friends, Australia and the United States.

Advocates of the new tax regime argue that in the long run everyone will benefit, as businesses and consumers become more efficient in their use of imported fossil fuel energy (helped along, in theory, by subsidies funded by the tax revenues). Will they prevail over those who say they're suffering the immediate pain of small rises in energy prices (for the average household per week, said to be NZ$4 [very roughly US$3 or UK£1.50] per week)?

It won't just be New Zealanders who keep an eye on what happens next.

Caspar Henderson

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