Most Read Contributor in New Zealand, September 2016
The Government has begun its review of the New Zealand Emissions
Trading Scheme (ETS).
discussion document has been released and submissions are due
on the future of the transition measures by 19 February
The submission deadline for the remaining ETS design features is
30 April 2016.
Preparing for a more carbon-constrained future?
A key objective of the review is to prepare the New Zealand
economy in the context of a strengthening international response to
climate change and potentially higher carbon prices in the
The international community is meeting in Paris from 30 November
to 11 December with an ambitious goal of a new universal post-2020
agreement that will keep global warming below 2°C.
New Zealand has proposed an "Intended Nationally Determined
Contribution" of reducing greenhouse gas emissions to 30%
below 2005 levels by 2030.
The ETS review discussion document signals the need for a
tightening of the ETS screws in order to meet New Zealand's
international obligations and reduce net emissions below business
The transitional measures include:
a one for two surrender subsidy on emissions
a price cap of $25 per unit, and
exclusion from the surrender obligations of the scheme for the
Climate Change Issues Minister Tim Groser has
confirmed that agriculture will be outside the scope of the
The priority consultation issues relate to whether the
one-for-two surrender subsidy should be removed (and if so, when),
and how the costs of moving to full surrender obligations should be
The review will also investigate:
how the design of the ETS needs to evolve, and
operational and technical improvements.
Key design issues being consulted on include the future of free
allocation and how the supply of units should be managed (including
access to international units, the role of auctioning, and measures
to manage price stability such as a 'price floor').
The discussion document acknowledges that the ETS alone will not
drive New Zealand towards a low emissions economy and is also
seeking feedback on barriers to the efficient uptake of low
emission or no emission technologies.
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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