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Nick Smith

14 September, 2009

Revised ETS balances NZ’s environment & economy

The Government, with Maori Party support, will revise the Emissions Trading Scheme to reduce the costs to households and the impact on jobs while ensuring New Zealand takes a responsible approach to the global problem of greenhouse gas pollution and climate change.


“New Zealand needs an emissions trading scheme to discourage carbon pollution, improve energy efficiency and reward afforestation,” Minister for Climate Change Issues Nick Smith says.


“Amendments to the existing legislation are required to make the ETS workable and affordable.”


Features of the revised scheme include:



  • Revised entry dates of 1 July 2010 for transport, energy and industrial sectors and 1 January 2015 for agriculture

  • A transitional phase until 1 January 2013 with a 50% obligation and $25 fixed price option for the transport, energy and industrial sectors

  • A production-based industry average approach to allocations for trade exposed, emissions intensive businesses

  • A phase-out of industry support aligned with trading partners and the Government’s long-term -50 by 2050 emissions reduction target

  • Incentives for afforestation created by a domestic and international market for carbon credits

  • Enhanced transitional support for the fishing industry

“These changes will halve the price impact on households for fuel and electricity to 3.5c/l and 1c/kWh. The fixed price option will provide certainty and stability to enable carbon markets to mature. The changes to transitional support for industry will encourage cleaner technologies without driving jobs, investors and emissions offshore.


“New Zealand’s response to climate change policy risked falling behind without the support of the Maori Party. These changes reflect concerns of the Maori Party over impacts of the Emissions Trading Scheme on low-income households and primary industries such as fishing, forestry and agriculture. Further work will be done with the Maori Party on an extension to the energy efficiency assistance for low-income households, promotion of afforestation, biodiversity protection, recognising the Treaty relationship in ongoing climate change policy and on Treaty settlement issues arising from the ETS.


“The Government will be introducing to Parliament next week a Climate Change Bill implementing these changes to the ETS. We will be continuing to work with Labour and other parties to try and build as wide a consensus as possible in this important policy area. Our objective is to have the revised law passed by the time of the Copenhagen climate change conference in December.”   

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