Hot Air: Corporate Corruption New Zealand-Style

Hot Air: Climate Change Politics in New Zealand

Directed by Alistair Barry Abi King-Jones (2013)

Film Review

This documentary left me with a sick, futile feeling about the hopelessness of real democracy occurring any time soon in New Zealand. It tells the really sad tale of wealthy business interests aggressively blocking meaningful action on emissions reduction for over 30 years.

I was previously unaware that in 1990 the incoming National (conservative) government set a target of reducing NZ’s carbon emissions by 20% in 10 years. Alarmed by data being released by international climate scientists, National’s Minister of the Environment Simon Upton persuaded cabinet to agree to a $10/tonne carbon tax. His plan was to implement the tax in 1997, if polluting industries failed to achieve voluntary emissions targets.

In 1993, Upton established a board of inquiry to hear the resource consent for the Stratford (Taranaki) Power Station. The final consent mandated that Electrocorps plant 5,000 trees per year to mitigate the additional CO2 emissions produced by the power station. Not a single tree would be planted, after  Taranaki Regional Council used their powers under the Resource Management Act (RMA) to remove this stipulation.

When Upton launched the Working Group on Climate Policy (WOGOCOP), New Zealand’s Business Roundtable (under the guidance of Carter Holt Harvey*) quietly arranged for US climate denier Fred Singer (to to tour New Zealand.

The company’s next move was to form the Greenhouse Policy Coalition with New Zealand Steel, Coldco (a company specializing in refrigeration which has since been liquidated), Melbourne Cement and the New Zealand Oil Refining Company. Through massive lobbying, this Coalition successfully blocked each and every regulation aimed at reducing carbon emissions.

By 1996, when New Zealand enacted an MMP (Mixed Member Proportional) voting system, New Zealand’s per capita carbon emission were 7% higher than 1990 (and higher than most other industrialized countries).

In 1997 New Zealand signed the Kyoto treaty, committing New Zealand to reduce carbon emissions 5% from 1990 levels by 2012. It would be two years before Parliament ratified the treaty, after a Labour-led coalition under Helen Clark assumed control of government. At this point, the dairy cooperative Fontera and Tiwai Point aluminum manufacturer joined the pro-corporate Greenhouse Policy Commission in commissioning a statistically flawed Institute of Economic Research study. It claimed a carbon tax would reduce New Zealand GDP by 1%.

Under the New Labour government, Contact Energy received approval for a new gas-fired power plant and Genesis Energy a permit to increase coal burning (and carbon emissions) at their Huntley power plant. During the same period, Fonterra massively increased their use of coal (and their emissions) to dry milk solids (for export to China).

In 2005, New Zealand’s richest man Graeme Hart bought Carter Holt Harvey and began pulling down the company’s forests to replace them with dairy farms. Under Kyoto, this represented a potential cost to NZ taxpayers of $68 million (for disestablishing the carbon credits they had committed to).

Until 2006 when Al Gore released his film The Inconvenient Truth, Labour Environment Minister Pete Hodgson essentially carried the climate change issue alone – with the Green Party, Greenpeace, and other New Zealand environmental groups only signing on after 2006.

In lieu of a carbon tax, the Labour-led coalition, with the support of the National Party, opted to join the global Emissions Trading Scheme (ETS)* in in 2008. The same year, National would resume control of government, withdrawing from the Kyoto Protocol in 2012.

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*Carter Holt Harvey specializes in forest plantation management and timber production.

**Under NZ’s ETS, the biggest polluters (outside of agriculture, which is exempt), can purchase credits to produce carbon emissions by investing in carbon sequestration schemes in the Third World. It has proved totally useless in preventing the continuing rise of our country’s carbon emissions. See link The Carbon Trading Racket

The film can be viewed free at https://www.hotairfilm.co.nz/

The Yes Men: Culture Jammers Extraordinaire

The Yes Men are Revolting

Directed by Jacques Servin and Igor Vamos (2014)

Film Review

Culture Jamming (def) – a tactic used by anticorporate social movements to expose corporate “methods of domination” by disrupting or subverting corporate media culture and its mainstream cultural institutions.

The Yes Men are Revolting is the third full length documentary by Andy Bichlbaum and Mike Bonanno (aka Jacques Servin and Igor Vamos). The Yes Men’s goal is to use satire and humor to underscore the total insanity of our present corporate-run society. For the first time, the 2014 film includes biographical material and frank discussion of Andy and Mike’s episodic despair over the difficulty of producing real change.

Most of their work relies on their elaborate impersonations of corporate oligarchs and government bureaucrats to portray the world as they believe it should be. The official and media reactions to the improbable causes their alter egos espouse are eye wateringly funny.

Among my favorites:

•  The one in which they impersonate a Chamber of Commerce (official oil industry lobby) at the National Press Club calling for a carbon tax.
• Their campaign to liberate Barbie and Ken from oppressive gender stereotypes.
• The time they impersonate Shell Oil officials and throw a lavish party to celebrate the immense profit potential of melting Arctic Sea ice.
• The time they pose as Gazprom officials presenting a kidnapped polar bear to the Amsterdam zoo.* This was after the US government revoked Shell’s Arctic drilling permit and the company partnered with Gazprom intending to drill the Russian side of the Arctic Circle.
• The Brokers and Police March they organized during Occupy Wall Street.
• Their promotion of a special NYPD program in which black males receive a free McDonald’s Happy Meal after their third stop and frisk.

The documentary climaxes with their best and most outrageous prank. First they they reserve a spot on behalf of General Colin Powell’s office at a Homeland Security conference. Then they impersonate a Department of Energy spokesperson and propose to replace all fossil fuels with solar panels and wind turbines to be owned and operated by Native American reservations. The segment culminates with all the defense contractors circling the room in a traditional indigenous dance.

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* Amsterdam is home to the corporate offices of Royal Dutch Shell.

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I must admit to being totally addicted to the Yes Men. Here are their earlier films if you haven’t seen them:

The Yes Men (2003)

The Yes Men Fix the World (2009)

Can We Stop Climate Change Without Dismantling Capitalism?

The Cross of the Moment

By Jacob Freydont-Attie (2015)

Film Review

Can climate change be addressed without dismantling capitalism? The current track record of world leaders suggests not – especially with the election of the world’s most prominent climate denier to the US presidency.

The Cross of the Moment is a documentary exploring the climate change dilemma and various options for limiting global warming and mitigating the effects of catastrophic climate change. It’s produced in a panel discussion format, with the filmmaker posing specific questions to prominent astrophysicists, climate scientists, political economists and climate activists (including Bill McKibben, Gary Snyder, Derrick Jensen, Peter D. Ward, Jill Stein, Bill Patzert, and Guy McPherson). I’m not normally a big fan of talking heads, but the optimism conveyed by this film – in stark contrast to the usual alarmist arguments – definitely held my attention.

I was especially impressed with Bill McKibbon’s elegant explanation of why changing light bulbs and other market-based behavioral changes aren’t going to end global warming. The climate activist lays out an elegant argument why systemic structural changes is needed to wean humanity off of fossil fuels and why fossil fuel companies aren’t going to allow this without a major global movement to counter their power and greed.

The other panelists present a range of views on the specific structural/systemic changes that are necessary to prevent climate changes from wiping out our ability to produce food. Most seem to agree that fossil fuels could be totally phased out – and replaced by renewable energy – by 2050. They estimate this could be done for a total capital cost of $15 trillion (which according to the IMF is less than we currently spend annually to subsidize the fossil fuel industry*).

The film offers a number of viewpoints on how to bring this about. One economist favors a carbon tax; another would totally ban wasteful industries such as packaging (the third largest global industry after energy and food) and junk mail (which produces 51 millions tons CO2 annually in the US alone). Two activists express the view that the political corruption exerted by the fossil fuel industry couldn’t be overcome without dismantling capitalism altogether.

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* According to the IMF, fossil fuel companies benefit from $5.3 trillion a year in subsidies.

 

Reconciling Heathrow’s Third Runway with UK Climate Commitments

BBC News reports the British cabinet has just approved the extremely controversial third runway at London’s Heathrow airport. It will allegedly bring billions of dollars of economic benefit to Britain’s economy and create tens of thousands of new jobs.

Oh really? Big business is always promising pie in the sky economic benefits and job creation for big infrastructure projects that seriously disadvantage the rest of us by evicting us from our homes and otherwise destroying our quality of life. Experience teaches these economic projections aren’t worth the paper they’re written on. Thanks to the growing complexity of the global economy, economists can predict what the economy will do next month – much less 20 years from now.

The inimitable George Monbiot says it all in an October 18 opinion piece in the Guardian: “In a world seeking to prevent climate breakdown, there is no remaining scope for extending infrastructure that depends on fossil fuels.”

As Monbiot rightly points out, there’s no way Prime Minister Theresa May can allow Heathrow to build a third runway and simultaneously uphold the Paris climate change agreement Britain signed last year.

Subsidizing Air Travel for the Rich

He cites last year’s Airports Commission report, which offers two possible strategies for ensuring the new runway (and extra flights) won’t conflict with the climate pledges Britain made in Paris. The first is for the rest of the economy to make extra cuts in greenhouse gases to accommodate aviation. Already the Climate Change Act imposes a legal target of 80% reductions by 2050. But if flights are to keep growing as the commission expects, those cuts would have to rise to 85%. This is fundamentally unjust. The large majority (75%) of Heathrow’s international passengers are holiday travelers. As they also have a mean income of £57,000, this option makes everyone else pay for the holidays taken by the well off.

The second option they offer is a carbon tax on aviation. An analysis by the Campaign for Better Transport suggests that the tax required to reconcile a new runway with Britain’s carbon commitments is somewhere between £270 and £850 for a return flight for a family of four to New York.

IMF Calls for Carbon Tax on Aviation

The International Monetary Fund is also calling for a carbon tax on aviation and shipping to help the industrialized world meet the carbon reduction goals it agreed to in Paris. Emissions from planes and ships, presently accounting for 4% of global emissions, are steadily increasing. Unlike other forms of transportation, it’s impossible to replace jet fuel with more carbon neutral energy sources such as electrification.

As Monbiot points out in his article, it makes absolutely no sense to spend billions of dollars on this infrastructure boondoggle and then price people out of the air travel market with a carbon tax. For this simple reason, he predicts the third runway won’t happen. The current timeline proposed by the Department of Transport is so long and convoluted, construction on a third runway couldn’t start before 2020. I suspect Monbiot is right – that it won’t happen at all.

photo credit: Liberal Democrats Brian Paddick with London Borough leaders campaigning against Heathrow expansion via photopin (license)

Telling the Truth About Debt, Austerity and Taxation

The Joy of Tax: How a Fair Tax System Can Create a Better Society

by Richard Murphy

Corgi Books (2015)

Book Review

Although the topic is economics, I personally guarantee this product to be totally painless. Murphy describes economics in ordinary comprehensible language – unlike mainstream economists who treat economics like a religion that can only be understood by high priests – and who speak and write in obscure language so you can never be sure if they’re telling the truth or not.

In The Joy of Tax, UK Tax Justice Network co-founder Richard Murphy offers a radically pioneering approach to tax and fiscal policy.  Murphy is one of the first economists to link tax policy to the 400- year-old reality that nearly all money is created by private banks out of thin air.

For political reasons, most economists try to conceal that private bank loans, i.e. debt, are the source of nearly all money in circulation. According to Murphy, the recent admission by the Bank of England (Quarterly Bulletin April 2014) about the true source of our money makes it possible to debunk a number of myths perpetuated by mainstream politicians and economists. Some examples: that investment is only possible when there are sufficient savings in the economy, that government debt is bad and that austerity, balanced budgets and government surpluses are good.

A point Murphy emphasizes repeatedly is that government also has the ability to create money out of thin air. Moreover it has regularly exercised that right to stimulate a stagnant economy. In fact, because all money is created as debt, it’s essential for government to “create” money (by spending it into the economy) whenever private banks fail to create sufficient credit. If this didn’t happen, severe economic recession results.

In Murphy’s view, the primary purpose of taxation is to reclaim the money government creates to keep it from over-inflating the economy. He claims the conservative elites who rabbit on about repaying government debt are really making the case that only private banks should have the right to create money. Aside from making them enormously rich, this makes no sense. Private banks are incapable of acting in the public interest – by law they can only act in the interest of their shareholders.

Citing Adam Smith in The Wealth of Nations, Murphy maintains a rational tax system can deliver other important goals, such as reducing inequality, recovering externalized costs (e.g.  pollution, toxic waste) imposed by corporations and promoting economically and ecologically sustainable growth.

For the current tax system to accomplish these goals, it would need to be far less regressive. At present most of the tax burden falls on middle and low income taxpayers. According to Murphy, the global economy will continue to stagnate until the wealthy shoulder their fair share of tax.

To make our current tax system fairer, Murphy proposes to introduce a number of “progressive” taxes, including a financial transaction tax, a wealth tax, a carbon/pollution tax, a land value tax to fund local government and a special tax on corporations that fail to re-invest their profits. He also proposes to do away with the current welfare bureaucracy by introducing an Unconditional Basic Income (UBI).

Although most of these tax reform proposals are specific for the UK, they would clearly produce similar benefits for the US and other post-industrial economies.

Originally published in Dissident Voice

Washington Activists Seek Carbon Tax

Carbon Washington (CarbonWA) is a citizens’ coalition seeking to enact a statewide carbon tax through a citizens’ initiative.* I-732 would incrementally institute a tax of on all fossil fuels consumed in Washington State. The revenue raised would be used to cut the state sales tax by 1%, to eliminate the Business and Occupations (B&O) tax on manufacturing and to fund the Working Families Rebate (a program the state legislature created in 2008 but never funded).

British Columbia’s Carbon Tax

I-732 is modeled after a carbon tax British Columbia (BC) introduced in 2008, which has received lavish praise from the (pro-corporate) Economist. Prior to its enactment, business warned the carbon tax would increase costs and slow the economy, while the left-leaning New Democratic Party (NDP) warned it would hurt the poor. Both were wrong.

Because the funds raised by BC’s carbon tax are used to cut income taxes (for individuals and businesses), it has been as beneficial for the British Columbia economy as for the environment. In a way, this makes a lot of sense. Taxing people for working and adding wealth to the economy is one of the biggest drags on economic growth there is. It makes a lot more sense to tax activities you want to discourage, such as polluting the atmosphere.

BC also implemented their carbon tax incrementally. The new tax was initially set at C$10 ($10) per tonne of carbon-dioxide emissions, rising by increments of C$5 per year to C$30 in 2012. At present this translate into a 7 cent per litre tax (approximately 25 cents per gallon) on gasoline.

As predicted, the carbon tax has proved as beneficial  for the economy as the environment. Since 2008, per capita fuel consumption in British Columbia has dropped by 16%, which contrasts with an increase of 3% in the rest of Canada. The province now has the lowest income tax rate in Canada and one of the lowest corporate tax rates in North America. Meanwhile per capita GDP continues to outperform other provinces. BC also enjoys lower jobless rates. Thus it’s no wonder it remains extremely popular, supported by 64% of BC residents.

How I-732 Will Work

Under I-732, the state will collect a tax on all fossil fuels sold or used within Washington State. This will include fossil fuels sold or used for air travel, motor vehicles boats, and electrical generation. (19% of Washington’s electricity is renewable, generated by hydropower). The tax rate will start at 15 dollars per metric ton of carbon dioxide as of July 1, 2017, increasing to 25 dollars per metric ton as of July 1, 2018, with automatic increases thereafter by 3 ½ percent plus inflation.

This tax swap will take place over two years. B&O tax on manufacturers will be eliminated in full the first year. The state sales tax will be reduced by ½ percentage point per year over two years. The Working Families Rebate will phase in from 15% of the federal EITC (Earned Income Tax Credit) in the first year to 25% of the federal EITC in the second year and beyond.

Halving US Carbon Emissions

Carbon Washington executive committee member Yoram Bauman hopes Washington will serve as a model for other states. According to Bauman, CO2 emissions could be halved if all fifty states adopted similar a similar carbon tax.

More information at www.carbonwa.org

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*I-732 is an initiative to legislature. If Carbon Washington collects enough signatures to qualify, the 2016 legislature has a choice of enacting it into law, enacting substitute legislation or placing it on the 2016 ballot.