The Taxpayers’ Union is slamming this week’s announcement by Government that agricultural emissions will attract a price set by politicians and bureaucrats by decree rather than using the market price of the Emissions Trading Scheme, calling it “the worst of all worlds”.

Taxpayers’ Union Campaigns Manager, Callum Purves, says: “The whole point of the Emissions Trading Scheme is to act as an invisible hand incentivising cuts to emissions, generally unnoticed and in the least economically damaging way. Politicians playing favourites with agriculture – to engage in Muldoon-style price setting for their favoured sector – undermines its integrity and long-term stability.

“Even if just a transitionary measure, having politicians on the tiller has turned He Waka Eke Noa into an arbitrary tax. Agricultural emissions should be in the ETS to ensure that our emissions are being cut in the most efficient way – not where politicians and the lobbyist industries necessarily prefer it.

“If it is more cost-effective for farmers to buy offsets in other industries, including internationally, they should be able to do so. Forcing already highly efficient farms to cut on-farm emissions when the same outcome could be achieved more cheaply by funding forestry, for example, makes no sense. The genius of the ETS is that it creates the lowest cost pathway to emission reduction.

“If there are questions about international competitiveness, that is a separate issue and better addressed with export or equalisation subsidies, if absolutely needed.”