KEY POINTS:
The Government will decide by September whether it will move to greenhouse gas emissions trading next year, says Climate Change Minister David Parker.
Under the scheme, businesses will be able to either reduce their emissions by working more efficiently, or - if it is cheaper or easier - buy an allocation from someone else with a surplus.
One way might be to pay a forest owner not to cut down trees, which would reduce the release of carbon to the atmosphere.
"Many details have to be considered, before a final decision can be taken," Mr Parker told a media briefing today.
"These include when different sectors come in, the transitional path for emissions, and the stringency of the targets once they are in.
"We are looking for a design that will be economy-wide, and include all sectors, and all gases."
"Cap-and-trade" emissions trading is a market-based means of reducing greenhouse gas emissions.
In effect, an acceptable amount of greenhouse gas emissions will be allocated to different sectors -- the "cap".
Emissions trading caps volume, but the market would set the price paid by industries with excess emissions and a trading scheme could provide businesses with a flexible way of reducing their "carbon footprint", Mr Parker said.
Some sectors would be able to do more than others because they would have more cost-effective choices, Mr Parker said.
"New Zealand's emissions mainly come from the gas and coal we use in electricity generation, the petrol and diesel we burn in our vehicles, methane and nitrous oxide from ruminant animals and fertiliser, methane from waste, and the carbon dioxide released from forests that are cut down and not replanted," he said.
He outlined the Government's timeline for decisions, with a final package for an emissions trading scheme completed in August, and regulations to be drafted and imposed between October and May next year. Select committee hearings on law changes will be held in February 2008.
Mr Parker said he had so far met with every political party except National, which had not responded to an invitation to its climate spokesman, Nick Smith, and he would make a further effort to involve National.
"We have already been engaging with willing political parties on climate change policy over the past months, and we look forward to working with them further on design details, as we move forward," he said.
- NZPA
