2 Jul 2012

Govt delays changes to Emissions Trading Scheme

10:09 pm on 2 July 2012

Prime Minister John Key says now is not the time to be increasing costs for businesses in the Emissions Trading Scheme.

The New Zealand Government announced its response on Monday to a review of the scheme in June last year and has delayed making any changes to the ETS until another review is held in 2015.

Businesses in ETS were to face higher costs from 2013, but the Government has decided to keep the scheme as it is. Most sectors will continue to pay half the cost of their emissions.

The cap on carbon prices - known as the fixed price option - will be maintained at its current level. The Government has also confirmed plans to off-set costs for pre-1990 forest land owners.

Agriculture emissions from livestock and fertiliser were due to enter the scheme in three years' time, but no date has been set.

John Key says it is important that New Zealand does its share, but defended the decision to delay making changes to the ETS.

"It's important, I think, that we have an Emissions Trading Scheme to put a price on carbon, but now is not the right time in a very globally uncertain economic environment to put more costs on households and more costs on consumers and businesses."

Mr Key says the delay in making changes to the scheme will cost the Government $80 million a year, but will have no impact on the target of reaching surplus by 2014/15.