The Emissions Trading Scheme (ETS)
The Climate Change Response (Emissions Trading and Other Matters) Act further softens the ETS’s implementation to avoid imposing increased costs on business in the current difficult economic environment.
The legislation does not specify a phase-out date for the transitional arrangements, the ‘one for two’ surrender obligation and the fixed price option, meaning that they will remain in place until at least the next ETS review in 2015.
Continued unlimited access to international units and plans to increase the domestic supply via the auctioning of NZUs should ensure that businesses can still acquire relatively cheap carbon credits.
The “opt-in” provisions for liquid fossil fuels have been extended to all obligation liquid fuels (instead of just jet fuels) to allow large purchasers of fuel to take responsibility themselves for the emissions from the fuel they purchase, rather than having that cost built into the price they pay the fuel supplier.
Emissions reduction target
New Zealand has committed to a non-binding target of reducing greenhouse gas emissions to 5% below 1990 levels by 2020. The commitment is made under the UN Framework Convention, New Zealand having opted out of the Kyoto Protocol.