NZ opts to phase-in carbon trade

Friday, 21 September 2007

The New Zealand government has announced an emissions trading scheme will begin in 2008 to reduce the country’s greenhouse gas emissions, ending more than two years of delay in its policy response to climate change.

The cap-and-trade scheme will cover all six greenhouse gases but be phased in sector by sector over five years, starting with the next year with the forestry industry. The scheme will provide a boost for foresters, allowing carbon credits to be earned and retained by forest owners – a reverse of the previous, deeply-resented policy under which credits for carbon stored in forests planted since 1990 were nationalised by the government.

The oil industry will be brought into the scheme in 2009 and the power generation sector and high-energy/heavy-emitting industry in 2010. Emissions allowances for these sectors will be allocated at 90 per cent of their 2005 emissions.

The government said petrol prices would rise by 4 cents a litre from 2009. Power company Contact Energy estimates a 4 per cent rise in retail electricity prices at a cost of carbon of $NZ20 a tonne when electricity comes into the scheme.

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