Te Whanganui-a-Tara – Climate Change Minister James Shaw has welcomed recommendations from He Pou a Rangi, the New Zealand Climate Change Commission, on emissions trading scheme (ETS) settings.
For the ETS to do its job and drive real emissions cuts, it’s vital we have the right settings in place to ensure a fair price for climate pollution,” Shaw says.
New Zealand also needs to make sure that cost does not fall on people least able to bear it.
“ETS settings are updated annually, but this is the first time the commission’s independent, non-partisan advice will inform that process. This is due to the ETS reforms we made and the minister thanks and supports commission chair Dr Rod Carr and his team.
Under the ETS, businesses that emit carbon must surrender a carbon credit, or unit, for every tonne of pollution they emit.
Businesses must first purchase their credits in regular auctions. It’s important to note that changing these settings does not directly set the price of a carbon credit. Rather, the settings create the scope within which the price of pollution is discovered.
Officials will now consider the commission’s recommendations and provide further advice along with public feedback during the consultation phase, which is planned for September.
The ETS is a critical part of Aotearoa’s climate toolbox and the commission’s advice to government will be presented today and will soon be available on the commission’s website.
If changes are made to auction settings for 2023, they would not apply until the first ETS auction in March next year.
Aotearoa’s net-zero future is closer than ever before. Having the budgets in place is a critical part the move to rapidly cut out the pollution that causes climate change.
Meeting the budgets will help to create new industries and high-value jobs; lower household energy bills; a more climate-friendly agriculture sector; warmer, drier homes; exciting new technologies; the protection of native species and eco-systems; cost savings for businesses; and greater resilience in the face of increasing global uncertainty.
An emissions budget is the amount of greenhouse gases that can be put into the atmosphere over a period of time. The Zero Carbon Act requires that emissions budgets are met through domestic action alone.
In the last four and a half years, New Zealand has passed the Zero Carbon Act and established the Climate Change Commission.
It has a climate emergency response fund, paid for by the polluters themselves and required default Kiwisaver funds to be fossil-fuel free.
Aotearoa has become the first country in the world to require mandatory climate related risk reporting for listed companies and financial institutions.
It has banned new offshore fossil fuel exploration, started the New Energy Research Centre in Taranaki and kick-started the hydrogen economy in New Zealand.
It has banned new industrial coal boilers and put climate change back in the Resource Management Act.
It has brought in the clean vehicle discount and vehicle emission standards, which have led to a 300 percent increase in the import of electric vehicles.
