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Tuesday, 2 August 2011






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NZ review to look at linking with Australia CO2 scheme

NEW ZEALAND: A report reviewing New Zealand’s carbon-trading scheme will be released later this month and will look at how to link with neighbouring Australia’s carbon-pricing programme, Climate Change Minister Nick Smith said on Monday.

New Zealand’s emissions trading scheme is the only national outside Europe’s and the government has been conducting a mandatory review, with the results delayed after Australia unveiled full details of its planned programme on July 10.

“We’ve asked the review team to give a fine-tuning of their report, relative to the significant announcements that have been made in Australian policy,” Smith said, adding the government would likely announce the result of the review in late August.

“If we’re going to have an ambition to move to a trans-Tasman market post-2015, then that’s a complicated job that will require a lot of work from officials,” Smith told a climate change conference in Wellington.

New Zealand has been reviewing its scheme after it was expanded to include the transport and energy sectors on July 1 last year, which together produce about half the nation’s greenhouse gas pollution. Agriculture comprises the other half, mostly methane from livestock. The review is looking at whether to remove a NZ$25 ($22) fixed-price option for pollution permits; whether to drop the rule that emitters only have to surrender permits for half their emissions; and if agriculture should be included in the scheme from 2015.

Smith would not comment on either issue, but said he could positively rule out inclusion of agriculture prior to 2015.

The Ministry for the Environment released a separate report on New Zealand’s emissions trading scheme on Monday. The ministry found the programme was working as intended, lowering emissions and helping the country meet its 2008-12 target under the U.N.’s Kyoto Protocol, Smith said.

Integration with New Zealand is also an issue being considered by Australian officials said Australia’s Parliamentary Secretary for Climate Change and Energy Efficiency, Mark Dreyfus.

“Our emissions trading schemes do not have to be identical to link satisfactorily ... obviously there will be different responses due to differences between our two economies,” Dreyfus told the conference.

Despite the tenuous position of Australia’s carbon tax plan, the government was confident the scheme would survive beyond Australia’s next federal election. “I expect that scheme will remain in place no matter what happens at the election in late 2013,” Dreyfus said.

The political opposition is firmly opposed to the scheme, which begins with a tax of A$23 ($25.3) a tonne of carbon emissions on the nation’s top 500 polluting firms from July 1, 2012, before moving to emissions trading in mid-2015. Smith said 2015 was the target for aligning the two schemes.

The environment ministry report released on Monday showed 98 percent of emissions were met with the local scheme currency, known as New Zealand Units, as opposed to the fixed-price cap of NZ$25, or using U.N.-issued international units, Smith said.

The report showed a change in investment decisions, helping net emissions fall in 2008 and 2009, Smith said, adding: “I feel very confident in saying we will comfortably meet our Kyoto target”. Reuters


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