NZ trading scheme slashes carbon emissions

Age
Tuesday 2/8/2011 Page: 5

NEW Zealand's emissions trading scheme has helped boost investment in renewable energy and cut greenhouse gas emissions, according to a review by the country's conservative government. It also appears to have won over a sceptical business community, with 63% of companies saying in submissions to a government panel they backed the climate scheme. Two years ago 78% were opposed.

Speaking in Wellington, New Zealand Climate Change Minister Nick Smith said there had been a "marked and positive shift" in business attitudes to the scheme. "This reflects the value of certainty the fact that critics overstated the costs of the scheme and the careful approach the government has taken to the transitional arrangements", he said.

While support for the scheme has grown, Dr Smith said it should be noted that 60% of businesses still argued the scheme should be slowed down. Only 15% wanted it sped up. He said the New Zealand National Party government hoped there would be a trans-Tasman carbon market with Australia after 2015. "The debate in New Zealand and in Australia on putting a price on carbon has been pretty ferocious, but it is a vital first step to the change we need to make as a society towards a low-carbon economy", Dr Smith said.

The first annual report into the NZ scheme which was largely based on former prime minister Kevin Rudd's abandoned emissions trading system found it had "performed to expectations". Nearly 80% of energy generation last year came from renewable sources a 12-year high that reflected both the impact of the carbon price and increased rainfall allowing greater use of hydropower power. Twelve new renewable energy plants were approved in 2010 five times the annual average across the past decade.

In forestry, incentives to maintain existing forests and invest in new plantations turned a net loss of about 18,000 hectares of trees in 2007 turned to an expected net increase of 5700 hectares this year. Dr Smith said national emissions had fallen for two consecutive years for the first time since 1990. The scheme included forestry from January 2008. Energy plants, large industry and transport were covered from July 2010, but initially pay a discounted carbon price of about $10 a tonne of gas emitted less than half the proposed Australian starting price of $23 a tonne.