New Zealand delays emissions trading scheme

November 17, 2008

New Zealand's incoming government will delay the implementation of the country's emissions trading scheme (ETS) pending a full inquiry into climate change.

The decision was revealed in the National Party's confidence and supply agreement with the ACT Party. The agreement commits National to a review of climate change policy by a special select committee of Parliament. The review will include the emissions trading scheme and possible alternatives to it, as well as "hear[ing] competing views on the scientific aspects of climate change" and considering whether responding to climate change is economically worthwhile. Implementation of the ETS would be delayed until the review is complete — a process expected to take at least a year.

The ETS requires companies emitting greenhouse gases to cover their emissions with permits. The legislation was passed on September 10, 2008, and provides for a phased implementation, with forestry entering the scheme immediately, industrial and energy sector emissions entering in 2010, and transport fuels in 2011.

The National Party won a victory over the Labour Party in last week's elections, and has formed a new government cabinet, led by prime minister-elect John Key.