Government Proposes ETS Changes
April 13, 2012 New Zealand Taxation
The government is looking at implementing greater controls on the use of foreign carbon credits by New Zealand businesses, and is also investigating the feasibility of delaying the implementation of ETS rules in the national agricultural sector.
On April 11th the Minister of Climate Change Tim Groser announced that the government has released a consultation document, outlining a series of proposed changes to the national Emissions Trading Scheme and calling for public comment on the alterations.
Amongst the changes detailed in the report, the government proposed placing restrictions on the use of carbon credits issued and paid for in foreign countries. The move would coincide with the government gaining extra powers to auction off greater numbers of New Zealand-based carbon credits units.
According to experts, instating stricter controls on the use of foreign credits will lead to New Zealand businesses becoming more responsible with their carbon emissions, as they will no longer be able to rely on cheaper foreign credits. The government plan will stem the flow of money to overseas carbon traders, and would result in greater tax revenues for the New Zealand national budget.
The government has also proposed further delays to the inclusion of agricultural emissions to the ETS scheme. If approved, greenhouse gas emissions produced from agricultural activity would not be included in the emissions trading system until 2014, with a further option to delay the rules until 2018. The wait is intended to allow time for the government to synchronize the national carbon trading market with the development of similar ETS schemes around the world.
Currently, the New Zealand government charges a set price of NZD 25.00 per unit of carbon.