The Ministry for the Environment is currently consulting on proposed changes to the emissions trading scheme (ETS). Specifically, the Government seeks views on the provisions for the carry-over of Kyoto units under the ETS.

The international regime requires units that are not carried over to be cancelled. The Government must decide whether and to what extent to extend New Zealand's 2.5 per cent international carry-over to individual account holders. The Government's current preferred option is not to do so, as the potential cost to taxpayers is seen to outweigh the benefits to individuals.

The aim of the consultation is to develop regulations for the carry-over of units within the ETS framework. The regulations aim to increase certainty in the scheme to provide market participants with necessary information to act efficiently and minimise the risk of financial loss, and to allow the regulations to apply equitably and transparently.

Submissions are due on 29 March. To read the full Consultation Paper, see here.