ETS development continues to be well signalled

The latest design changes to New Zealand’s emissions trading scheme have been progressively well signalled and are broadly positive, says BusinessNZ.

The Government’s latest set of changes include rules for auctions, pricing, monitoring, and penalties for the ETS.

BusinessNZ Chief Executive Kirk Hope says the deliberate process of clear, well-signalled changes is helping to build confidence in the scheme as its settings become progressively more onerous. The decisions around auctioning and the removal of the fixed price option are cases in point. We welcome the establishment of an independent auction body, as proposed in our submission.

"Some changes may need further revision, such as ability for the scheme to have a price floor, and the requirement for individual companies’ emission data to be made public. We fail to see the public benefit of these proposals especially at a time of increasing carbon prices.

"There remains a need for ensuring that prices in the New Zealand ETS are comparable to those in other countries, and for ensuring New Zealand companies’ competitiveness is not undermined by inconsistent progress towards pricing carbon across our trade competitors.

"It would also be preferable to have the coming ETS legislation considered after the Zero Carbon Bill, so that ETS legislation can be aligned with the targets finally legislated.

"BusinessNZ looks forward to working with the Government as it further develops the ETS and the market governance arrangements."

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