From 1 January, New Zealand is no longer legally liable for its greenhouse gas emissions.
31 December is the final day for the first commitment period under the Kyoto Protocol and New Zealand has not signed the second one, which runs from 2013 - 2020.
Climate Change Issues Minister Tim Groser is confident New Zealand will cut its greenhouse gas emissions.
With carbon prices being very low, he said there's not much incentive in the market to reduce emissions.
Mr Groser said he believes the price will pick up when the international recession is over.
But the Green Party says New Zealand has relied on forest planting and carbon trading to meet its Kyoto commitment and it must now set a cap on emissions.