Fri, Jul 02, 2010 - Page 4 News List

NZ starts emissions trading scheme

AFP , WELLINGTON

New Zealand launched an emissions trading scheme yesterday in a bid to curb the greenhouse gases responsible for climate change, but the scheme has angered both businesses and environmentalists.

Starting yesterday, energy, transport and manufacturing industries will have to pay for their emissions of gases such as carbon dioxide and methane, which have risen 23 percent in New Zealand since 1990.

Prices for fuel and electricity will rise, with the government estimating households will pay an extra NZ$5 (US$3.50) a week, although some critics say this estimate is far too low.

Businesses say the extra costs of the scheme will hurt them, while environmentalists say the costs are too low to encourage emission cuts.

However, Climate Change Minister Nick Smith said the emissions trading scheme (ETS) balances the need to cut emissions without damaging the economy.

“New Zealand’s emissions per person are among the highest in the world and are growing at one of the fastest rates among developed countries,” Smith said. “The ETS is the most efficient and least cost way to bring emissions under control, meet our international obligations and protect New Zealand’s clean, green brand.”

The ETS would drive investment in renewable energy, forestry and energy efficiency and reduce emissions, he said.

Under the scheme, polluting industries will have to buy credits for their emissions of carbon dioxide or other greenhouse gases, while businesses that reduce the amount of greenhouse gases in the atmosphere — mainly forest owners — will earn credits that can be sold to polluters.

The scheme offers a transition period for polluting industries with the government offering subsidies for several years, and agriculture — responsible for nearly half of emissions — comes under the ETS in 2015.

Opposition leader Phil Goff and environmental groups including Greenpeace said the low costs to industries mean there are minimal incentives for industries to cut emissions.

But exporters, represented by the Greenhouse Policy Coalition, say they will be at a disadvantage because of the ETS.

“From today, New Zealand companies competing in overseas markets where there is no price on carbon or competing internally against goods from those countries will be at a clear disadvantage,” executive director David Venables said.

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