[12 December/NZ Herald]

The Coalition Government has announced a raft of changes to the ETS as it strengthens the scheme to utilise it as the country’s main tool to battle climate change.  The changes including putting a cap on the Emissions Trading Scheme (ETS), limiting the number of units that can be traded, and incorporating permanent forests into the scheme. Under the ETS, companies are required to match each unit of emissions they report with a carbon credit they must deliver to the Government. People who plant forests, meanwhile, can report the carbon dioxide they take out of the air and claim credits, which they can sell. The ETS has been widely criticised in the past as parties were able to import credits with questionable origins which has led to deforestation occurring in New Zealand; the resulted in previous government banning overseas credits. Acting Climate Change Minister, Julie-Anne Genter, said auctioning would be introduced into the ETS in a way that aligned the supply of units with New Zealand’s emission reduction targets. The Government would also investigate the potential introduction of a price floor in the scheme. No decision had been made as to when the ETS would be reopened to international units but that was not a priority. The changes are expected to be introduced to Parliament next year as amendments to the Climate Change Response Act 2002, the legislation that established the ETS. A second round of decisions on the ETS are also expected next year, which will likely include consideration of the inclusion of agricultural into the scheme.