Government announces emissions trading scheme

An emissions trading scheme will reduce greenhouse gas emissions, promote environmentally friendly behaviour and create business opportunities for New Zealanders, according to Finance Minister Michael Cullen and Climate Change Minister David Parker.

The scheme, announced by the Labour-led government, will be phased in from next year, beginning with the forestry industry, and including all sectors and gases over time.

"Climate change is a real threat from which New Zealand is not immune. We must do our bit to help the world deal with it. As part of our response to climate change, Cabinet has agreed to the key design features for a New Zealand emissions trading scheme," said Cullen.

"An emissions trading scheme will create an incentive for businesses and households to make decisions that are good for the environment, and will discourage actions that cause greenhouse gas emissions."

New Zealand's forestry industry will receive incentives to plant trees equivalent to hundreds of millions of dollars under the scheme.

"Forestry is critical to New Zealand's response to climate change. We want to see more forests planted, and we want to see harvested forests replaced. The government, therefore, has agreed with the forestry sector that they should receive a free allocation of carbon credits," Cullen said.

"Consistent with the commitments we have made to farmers, the government is proposing that agriculture will not join the scheme until 2013, and the sector will also receive generous free allocation equivalent to 90% of their 2005 emissions.

"We have designed the scheme to assist business as much as possible without defeating the purpose of the scheme, and other industries will also receive transitional assistance."

"The government is now committed to providing opportunities for detailed engagement with interested parties, such as industry, consumer groups, NGOs and Maori, to ensure the final design of the scheme is fair and can be implemented effectively," said Parker.

Once emissions trading scheme legislation has been introduced, the public will be able to provide further input as part of the select committee process.

For more information, visit www.climatechange.govt.nz.