NZ looking to relaunch stalled carbon trade scheme

If you're new here, you may want to subscribe to our or .

| Sourced From |

WELLINGTON (Reuters) - The New Zealand government is expected to move to revive its emissions trading scheme in coming months and is closely watching neighboring Australia, which has just unveiled its carbon trade laws.

“For New Zealand to be competitive on the world stage, there’s no doubt we need an emissions trading scheme of some sort, because other countries will start looking at us,” said climate change consultant Gordon Shaw.

New Zealand put its fledgling scheme to meet its Kyoto Protocol obligations on ice, pending a review, after the National-led government came to power last November.

The revised scheme is not expected to be unveiled until later this year, with a view to launching in 2010, but talk of the new government scrapping the scheme was unfounded, a senior politician told Reuters.

“The debate is going to be around making our emissions trading scheme work, rather than should we have one at all,” said Peter Dunne, the chairman of the committee reviewing the legislation.

“The suggestion that we should do nothing, or that climate change isn’t a real and pressing issue, is fatuous,” said Dunne, who leads the United Future Party, which has a support arrangement with the ruling National Party.

New Zealand’s new government has said the existing scheme was too expensive and ambitious.

Australia on Tuesday unveiled its draft legislation, which will create the world’s most sweeping cap-and-trade scheme, if it can overcome political opposition. [nSP495083]

With Australia’s emissions trading scheme taking shape, New Zealand businesses will be expecting a broadly similar outcome, said Shaw.

CARBON NEUTRAL?

The Labour-led government, which lost the November election, had implemented the initial cap-and-trade scheme and wanted New Zealand to become carbon neutral by mid-century.

The National Party campaigned on reducing the burden to businesses under the scheme, and said it would aim at a 50 percent reduction in emissions from 1990 levels by 2050.

Half the country’s emissions come from agriculture, with transport and energy the other sectors included in the Labour scheme.

The stalled scheme had the large forestry sector included immediately, with other sectors from transport to agriculture phased in over five years.

Forests soak up large amounts of carbon dioxide, acting as carbon sinks and are a way to generate tradable carbon credits for investors.

Despite indications from the government the scheme will undergo minimal upheaval, investment in forestry to generate tens of millions of dollars in credits has been sidelined, said Roger Dickie, spokesman for the industry group Kyoto Forestry Association.

“There are quite a few people waiting to do something but they just continue to wait. No one is making decisions and no one is investing,” Dickie said.

Data released by the U.N. Climate Change Secretariat last November showed New Zealand had the sixth highest growth in emissions out of 40 industrialized countries between 1990 and 2006. The country’s greenhouse gas emissions grew 25.7 percent in the period.

Under the Kyoto Protocol, New Zealand’s emissions are meant to show no increase from 1990 levels between 2008 and 2012, the pact’s first commitment period.

As of the end of January this year, the New Zealand Treasury estimated the country’s liabilities under Kyoto at NZ$549 million ($275 million), meaning this is cost of the country meeting its zero-growth emissions obligations under Kyoto.