New Zealand Wants Green Trading Scheme (20-Sep-07)
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Full story: New Zealand Wants Green Trading Scheme (20-Sep-07)
New Zealand is aiming to cut pollution at the lowest cost to economic growth; the plan is to achieve this through allocating an agreed level of greenhouse gas emissions to each industry during the year 2008. Businesses can then either reduce emissions to this agreed level or conversely “buy” credits which allow them to pollute at higher levels.
At present New Zealand emits about 45.5 million metric tons more than the target set for them under the UN Kyoto Protocol, it is hoped that the cap and trade system will cut this amount in half.
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Wellington, New Zealand - New Zealand will begin introducing a system next year to cap greenhouse gas emissions and allow trading of emissions credits, aiming to cut pollution at the lowest cost to economic growth, senior officials said Thursday.
Under the plan, an agreed level of greenhouse gas emissions will be allocated to each industry in the country's economy. Businesses can either reduce emissions to the agreed levels, or buy "credits" that allow them to keep polluting at higher levels.
The system would cause an estimated rise in gasoline prices of about 4 NZ cents per litre, or 15 cents per gallon in 2009, and boost energy prices as much as 5 percent starting in 2010. But it would "substantially" and "cost effectively" reduce the country's gas emission levels, Climate Change Issues Minister David Parker said.
A similar "cap-and-trade" systems has been in place in European Union countries since 2005, where factories and industries are encouraged to cut emissions by giving them "pollution permits. If they produce less greenhouse gases than the total of their permits, they can sell the surplus certificates - also known as credits - to companies that find them cheaper than cutting their own emissions.
'Four cents to beat climate change, what a deal' It also includes buying emission target credits by investing in environmentally friendly projects in developing countries. This has created a fast-growing international carbon market, where certificates are bought and sold like a commodity.
New Zealand emits about 45,5 million metric tons more than the target set for the country under the UN Kyoto Protocol, and the new cap-and-trade system would cut that amount in half, Parker said.
"If we don't introduce an emissions trading scheme, emissions will increase further - to a deficit of around 65 million metric tons," he said.
The scheme sets no price for units of emission in New Zealand. Parker said rates would be set by the domestic and international markets and give New Zealand access to "offsets at best international prices."
"With an emissions trading system, we will get our emissions on a sustainable downward trend into the future," Parker told 250 business leaders gathered to hear the details.
The scheme will cover all six greenhouse gases blamed for global warming and all sectors of the economy.
"Four cents to beat climate change, what a deal," Parker told reporters.
The economic impact of the New Zealand scheme is estimated to clip 0.1 percent off gross domestic product growth over five years.
Prime Minister Helen Clark said New Zealand must protect its international markets and reputation as a "clean and green" society by facing up to the "climate change challenge."
Other policies to fight climate change include increasing renewable electricity generation to 90 percent from 69 percent of total output by 2025 and cutting per capita emissions from the transport sector by half by 2040.
New Zealand plans to be one of the first nations to widely introduce electric vehicles and to make its public sector "carbon neutral," Clark added. - Sapa-AP
- Source: iol
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