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New Zealand gov't moves to strengthen Emissions Trading Scheme

Xinhua, May 26, 2016 Adjust font size:

The New Zealand government Thursday moved to strengthen its Emissions Trading Scheme (ETS) after a barrage of criticism over its lack of action to reduce greenhouse gas emissions.

The government was phasing out a subsidy in the ETS that allowed some businesses to pay one emissions unit for every two tonnes of pollution they emitted, Climate Change Minister Paula Bennett said in a statement.

The one-for-two subsidy was a temporary measure introduced during the Global Financial Crisis to help moderate the initial costs of the ETS while businesses were struggling.

"The subsidy will be phased out over three years to give businesses time to plan and adjust, to support a more stable market," Bennett said.

"This is a significant step in helping New Zealand meet its ambitious target of reducing emissions to 30 percent below 2005 levels by 2030. More importantly, it will support our efforts to grow a lower-emissions economy."

However, while the unit price would gradually rise until 2019, the current price ceiling that capped units at 25 NZ dollars (17 U.S. dollars) would remain.

Changes to the subsidy primarily affected ETS participants in the waste, transport, energy, electricity and industry sectors, and importers of goods containing synthetic greenhouse gases.

Businesses exposed to international trade competition, and whose emissions were a big part of their costs, would continue to receive an allocation of emissions units to protect their competitiveness.

The opposition Green Party said it welcomed the scrapping of the subsidy, but added it was unlikely to significantly reduce the country's emissions.

The government had to fix the myriad of other problems in the ETS, or it would just be a cosmetic fix, said Green Party co-leader James Shaw.

"Scrapping the deal will at best reduce climate pollution by just 0.7 percent according to the government's own analysis," Shaw said in a statement.

"(Prime Minister) John Key appears to have forgotten that just months ago he committed in Paris to reduce emissions by 11 percent below 1990 levels. This clearly won't get him there." Endit