KEY POINTS:
Energy Minister David Parker has given a strong indication the Government will adopt a carbon emissions trading system in a bid to encourage clean energy.
When Parker released the Government's energy strategy in December he outlined a preference for a "cap and trade" system for curbing greenhouse gas
emissions.
Companies which exceeded a set cap for their sector would have to buy credits from companies which did not.
The option was included alongside other options such as a narrowly focused carbon tax on large polluters like electricity generators.
But Parker yesterday told a biofuels conference in Wellington the Government had moved even further in favour of an emissions trading system.
"Work is progressing on the design options for an economy-wide emissions trading scheme," he said.
"We believe an emissions trading scheme must be seriously considered for New Zealand - not only because it is a flexible way for business to find the least cost means of reducing their carbon footprint, but also because it gives greater certainty than a carbon tax that we will reduce emissions."
A spokeswoman for Parker later said the Government had not formally dropped the option of a narrow carbon tax, but that "all the work is focusing on an emissions trading system".
Parker said of 3000 submissions so far received on discussion papers launched with the energy strategy, most supported emissions trading as the means to cover the cost of greenhouse gas emissions.
New Zealand faces a projected liability of at least $550 million under the Kyoto Protocol, which requires signatory countries to either offset or buy carbon credits to cover greenhouse gas emissions above their 1990 level.
Parker said Cabinet would consider recommendations on emissions trading options, which would include all greenhouse gases.
In December, Parker said both the option of a trading system or a narrow emissions tax would mean costs being passed on to the consumer.
He said the Government wanted all new energy generation to be renewable unless other means were necessary for the security of supply.
The most likely renewable energy sources were wind, hydro, geothermal and wave and tidal power.
Parker also unveiled a range of possible transport sector measures, including mandatory average fleet efficiency standards on importers, introducing more biofuels and promoting plug-in electric cars.
Policy decisions on most of the ideas in discussion documents are expected to be taken this year, with initiatives beginning late this year and early next year.
Stepping on the gas
* The Government has received more than 3000 submissions on its strategy for responding to climate change, released late last year.
* Opinions differ on whether a carbon tax or a "cap and trade" system would be better. For example, Business New Zealand prefers emissions trading but the Chambers of Commerce favour the certainty of a carbon tax.
* Energy Minister David Parker says most of the submissions support emissions trading.
* Policy decisions are expected to be made this year.
- NZPA