Govt will consider advice to cut the numbers of ETS units being traded – it has already decided to cut red tape for builders
The settings for New Zealand Emissions Trading Scheme – a tool intended to help meet the country’s climate goals – need adjusting and the number of ETS units reduced, Climate Change Commission Chair Rod Carr says in a report released today.
There are too many units in the NZ ETS for the Government to make best use of it to reduce emissions, Carr says.
The excess number of units raises the risk that emissions budgets won’t be achieved.
Under the NZ ETS, certain companies and entities are required to hand in NZUs to the Government for their year’s-worth of emissions. Units can be issued by the Government in several ways – they can be bought from Government auctions, created by forestry, and in some circumstances a fixed number are available for free as industrial allocation.
The Commission’s latest recommendations on the ETS is included in a report covering 2025–2029
The surplus of ETS units will not self-correct, Carr says.
“ It is critical that the Government adjust the NZ ETS unit volume limits as soon as possible to draw the surplus down and bring the settings back into alignment with emissions reduction goals. There is scope to do this, while keeping the current price control settings essentially the same in real terms.”
“This step will help the NZ ETS reward investors, producers, and consumers for actions that contribute to meeting Aotearoa New Zealand’s emissions reduction goals.”
Another issue Carr has raised is the uncertainty about the Government’s priorities. This is affecting market and investor confidence in the scheme, further increasing the risk that the Government will not achieve its emissions reduction goals.
The full advices can be found in 2024 Advice on NZ ETS unit limits and price control settings for 2025–2029.
Climate Change Minister Simon Watts issued a media statement to say the recommendations have been tabled in Parliament.
“The Government will now consider this advice and make decisions on it later this year.”
Following public consultation, set to occur before mid-2024, proposed changes to the ETS will be finalised by the end of September 2024.
Just one other new media statement has been posted on the government’s official website
Building and Construction Minister Chris Penk announced the coalition Government is beginning its fight to lower building costs and reduce red tape by exempting minor building work from paying the building levy.
Currently, any building project worth $20,444 including GST or more is subject to the building levy which is paid at $1.75 per $1,000 of building work value.
From 1 July, all projects under $65,000 including GST will be exempt.
This change would reduce unnecessary red tape and mean Kiwis making small improvements to their homes, such as bathroom or kitchen renovations, would will save up to $113.
The excess number of units raises the risk that emissions budgets won’t be achieved.
Under the NZ ETS, certain companies and entities are required to hand in NZUs to the Government for their year’s-worth of emissions. Units can be issued by the Government in several ways – they can be bought from Government auctions, created by forestry, and in some circumstances a fixed number are available for free as industrial allocation.
The Commission’s latest recommendations on the ETS is included in a report covering 2025–2029
The surplus of ETS units will not self-correct, Carr says.
“ It is critical that the Government adjust the NZ ETS unit volume limits as soon as possible to draw the surplus down and bring the settings back into alignment with emissions reduction goals. There is scope to do this, while keeping the current price control settings essentially the same in real terms.”
“This step will help the NZ ETS reward investors, producers, and consumers for actions that contribute to meeting Aotearoa New Zealand’s emissions reduction goals.”
Another issue Carr has raised is the uncertainty about the Government’s priorities. This is affecting market and investor confidence in the scheme, further increasing the risk that the Government will not achieve its emissions reduction goals.
The full advices can be found in 2024 Advice on NZ ETS unit limits and price control settings for 2025–2029.
Climate Change Minister Simon Watts issued a media statement to say the recommendations have been tabled in Parliament.
“The Government will now consider this advice and make decisions on it later this year.”
Following public consultation, set to occur before mid-2024, proposed changes to the ETS will be finalised by the end of September 2024.
Just one other new media statement has been posted on the government’s official website
Building and Construction Minister Chris Penk announced the coalition Government is beginning its fight to lower building costs and reduce red tape by exempting minor building work from paying the building levy.
Currently, any building project worth $20,444 including GST or more is subject to the building levy which is paid at $1.75 per $1,000 of building work value.
From 1 July, all projects under $65,000 including GST will be exempt.
This change would reduce unnecessary red tape and mean Kiwis making small improvements to their homes, such as bathroom or kitchen renovations, would will save up to $113.
Latest from the Beehive
12 MARCH 2024
Recommendations from the Climate Change Commission for New Zealand on the Emissions Trading Scheme (ETS) auction and unit limit settings for the next five years have been tabled in Parliament.
The coalition Government is beginning its fight to lower building costs and reduce red tape by exempting minor building work from paying the building levy, says Building and Construction Minister Chris Penk.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
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