2 July, 2012
Government announces ETS amendments
The Government has announced amendments to New Zealand’s Emissions Trading Scheme (ETS) that will maintain incentives for emission reductions, without loading large extra costs onto households, employers and exporters.
“Today’s decisions are a reflection of the balanced and responsible approach this Government has taken to reducing greenhouse gas emissions. They offer Kiwi exporters, employers and households certainty in a challenging and changing world economy,” Climate Change Issues Minister Tim Groser says.
The key changes are:
- Keeping the ‘one-for-two’ obligation in place until after this year. This means participants in the scheme will continue to surrender units for half the carbon they emit;
- Maintaining the $25 ‘fixed-price option’ until at least 2015, which caps the price firms will face if carbon prices begin to rise internationally;
- Introducing off-setting for pre-1990 forest land owners, and allocating the full second tranche of compensation where off-setting is not taken; and
- Leaving agricultural emissions out of the ETS until at least 2015.
“We have considered in-depth the recommendations of the ETS Review Panel, listened to what those affected by the ETS are saying, and reviewed what our trading partners are doing. We also considered feedback through community consultation, including written submissions, a series of regional meetings, and hui.
“The National-led Government remains committed to doing its part to reduce greenhouse gas emissions, but it is worth noting that we are the only country outside Europe with a comprehensive ETS. In these times of uncertainty, the Government has opted not to pile further costs on to households and the productive sector.
“The Government remains an active and engaged participant in the on-going discussions focused on global agreements, and the changes announced today offer us useful flexibility to adapt in the future, while still demonstrating our commitment to doing our fair share,” says Mr Groser.
Additional information on the ETS amendments will be available later this week at www.climatechange.govt.nz.
A bill effecting these changes will be introduced later this year.