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Gov't claims success for New Zealand's budding greenhouse gas scheme

08-01-2011 15:20 BJT

WELLINGTON, Aug. 1 (Xinhua) -- New Zealand is "on target" to meet its obligations under the Kyoto Protocol regarding greenhouse gas emissions, the government claimed Monday on the release of the first annual report into the country's emissions trading scheme (ETS).

The report by the Ministry for the Environment said "a high proportion" of businesses participating in the ETS had met their obligations.

"Early signs are that a price on carbon has successfully entered the New Zealand economy; businesses and foresters are factoring in this price into their long-term decisions, and passing the price of carbon down to consumers," said the report.

Climate Change Minister Nick Smith said the ETS, which was piloted on the forestry sector in 2008, was driving new investment in forestry and renewable electricity.

"This report shows the ETS is working as intended, that the implementation has gone smoothly, and that New Zealand is now on target to meet its Kyoto obligations," Smith said.

A record 40,000 hectares of land deforestation between 2005 and 2008 had been reversed and the amount of afforestation had risen every year under the ETS, with forest coverage up by 4,700 hectares in 2010 and projected to rise by 5,700 hectares this year and 7,700 hectares in 2012, said Smith.

"The price incentives of the ETS helped renewable electricity hit a 12-year high of 79 percent in 2010," said Smith.

Eleven new renewable power stations with a total capacity of 1, 340 megawatts -- 59 percent wind generated, 26 percent geothermal, 13 percent hydropower and 2 percent tidal -- had been approved in the past year, he said.

"This is an all time high, is five times the annual average of the past decade, and contrasts with most new capacity over the last decade being fossil fueled."

The number of businesses eligible for support under the ETS was almost 300, triple the number originally forecast due to a large number of smaller businesses, mainly export horticulturists, being eligible but for relatively small amounts.

"It is encouraging that New Zealand's net emissions are down for two consecutive years after a 23 percent increase between 2000 and 2008. We are on target to comfortably meet our Kyoto target with a projected 21.9 million tonne surplus. Without the ETS we would be exceeding our target by 19.5 million units and face international costs of 485 million NZ dollars (428.2 million U.S. dollars)," said Smith.

The government would carefully consider future decisions on the ETS, particularly how quickly the scheme was rolled out, he said.

"The government's decisions will reflect our underlying approach of New Zealand doing its fair share relative to other countries on climate change and being mindful of the cost impacts on households and businesses."

The ETS was extended to the energy, industry and transport industries in July last year, initiating a trading market for carbon in New Zealand.

It encompasses 38 business activities, but new entrants are being phased into the scheme until the end of 2012.

New Zealand's ETS works by charging businesses that emit greenhouse gases for each tonne of carbon dioxide emitted (1 unit). Emitters buy units from industries, such as forestry, that carry out activities that remove greenhouse gases from the atmosphere. The units are bought and sold through the New Zealand Emissions Unit Register.

Editor:Wang Xiaomei |Source: Xinhua

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