NZ carbon price system hikes household costs

Jul 01, 2010

(AP) -- New carbon-trading laws intended to reduce climate-changing pollution emissions took effect Thursday in New Zealand, immediately sending gas prices higher.

Under the scheme, companies are given a pollution allowance, an amount of greenhouse gases they can emit without penalty. If they emit more than allowed, they must buy credits from a company that emits less than permitted and has a surplus to sell.

The scheme is an attempt to price carbon dioxide and other greenhouse gas emissions in the economy in a bid to cut the output of pollutants that cause global warming. It is projected to cut 19 million tons of carbon from New Zealand's greenhouse gas emissions over two years.

The system is one of the first of its kind outside Europe, though conservative Prime Minister John Key, heavily lobbied by big business and farmers, weakened earlier plans to impose greater costs on industry. He also delayed the entry of agriculture - New Zealand's biggest polluter, responsible for 49 percent of the country's greenhouse gas output - until 2015.

New Zealand's forestry sector was the first to enter the scheme in mid-2008. Transportation, industrial processing and energy sectors entered the scheme on Thursday.

Most transport fuel suppliers increased prices by New Zealand dollars 0.03 a liter ($0.12 cents a gallon) Thursday, taking the cost of standard gas for vehicles to NZ$6.80 ($4.67) a gallon. Electric power prices also began rising, as producers using carbon-based fuels passed their carbon costs onto consumers.

"It brings us no pleasure in putting that sort of price impact on New Zealanders, but that's what we have to do if we are going to do our fair share around this huge challenge of ," Climate Change Minister Nick Smith said.

He said households on average will pay an extra NZ$3.00 ($2.10) a week for and electricity.

New Zealand trades heavily on a "clean, green" image for its key agriculture and tourism industries, though have grown 22 percent over the last 20 years.

The European Union has had a so-called cap-and-trade system since 2005. Other nations, including the United States and Australia, have plans for similar systems that haven't materialized in the face of strong political opposition.

Explore further: China's struggle for water security

0 shares

Related Stories

EU backs climate change measures

Mar 05, 2008

The European Union has voted to support climate change proposals to cut emissions and increase energy efficiency.

Australia targets 20 pct renewable energy by 2020

Aug 18, 2009

Australia on Thursday passed a clean energy law requiring the country to produce 20 percent of its power from renewable sources by 2020 in move that could draw billions of dollars of green investment.

Experts say cap and trade not enough

Apr 13, 2009

A team of researchers at Carnegie Mellon University report in a new policy brief that cap and trade climate policies alone will not be sufficient to put the nation on track to achieve a 50 to 80 percent reduction in greenhouse ...

Pricing can cut CO2 emissions from electric generators

Apr 28, 2008

Levying a price on carbon dioxide released by electric generators could considerably reduce greenhouse gas emissions — even before the deployment of any environmentally friendly technology — according to scientists in ...

Recommended for you

China's struggle for water security

36 minutes ago

Way back in 1999, before he became China's prime minister, Wen Jiabao warned that water scarcity posed one of the greatest threats to the "survival of the nation".

Canada revises upward CO2 emission data since 1990

46 minutes ago

Canada revised its greenhouse gas emission data from 1990 to 2013 in a report Friday, showing it had higher carbon dioxide discharges each year, and a doubling of emissions from its oil sands.

Climate censorship gains steam in red states

14 hours ago

While plenty of people found humor in the recent news that officials in Florida and Wisconsin are censoring state workers' ability to talk about, much less work on, climate change, other states are not necessarily laughing. ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.