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Greenhouse Agreements good for business

27 April 2005

Streamlined process for Negotiated Greenhouse Agreements good for business

Negotiated Greenhouse Agreements are a key element of New Zealand's climate change policy and changes to provide a more streamlined process will benefit business, according to Ministry for the Environment Chief Executive Barry Carbon.

A Greenhouse Agreement is a binding agreement between a firm and the government that commits the firm to moving to world's best practice in managing greenhouse gas emissions.

In return, the government provides a full or partial exemption from the carbon tax that is to be introduced by 2008. NGAs are limited to firms or industries that, as a result of the carbon tax, face significant risk to their competitiveness relative to producers in countries with less stringent climate change policies.

Mr Carbon said the review of the NGA process was initiated by the government and will make it easier to negotiate agreements.

The review has not fundamentally changed the policy but, after an extensive consultation and feedback process, changes have been made to streamline the NGA process, reducing the time and cost to both businesses and government.

The key improvements to the way NGAs are determined, include:

Simplifying the way the targets for reducing emissions are determined; Simplifying the world’s best practice study requirements; Clarifying the way fuel switching is managed in the NGA. (This refers to the way in which a firm may swap one energy source for another in its business processes.) “NGAs deliver benefits. They typically result in reduced energy consumption (and lower bills) and cut greenhouse gas emissions. They are an excellent example of how business and government can work constructively together for mutual benefit,” Mr Carbon said.

“NGAs encourage businesses of all sizes to pursue the economic and environmental advantages of best practice in emissions management. The improvements to the NGA process, as a result of the review, will make it easier for businesses to engage.”

To help firms and industries to understand their eligibility and the benefits of the NGAs, the Ministry for the Environment’s Climate Change Office is holding a series of briefings to be held:

Friday 29 April, 1.30pm - 4.00pm, PricewaterhouseCoopers, PWC Tower, Level 22, 188 Quay Street, Auckland Monday 2 May, 3.00pm - 5.00pm, Conference Rooms 1 & 2, Town Hall, 86 Kilmore Street, Christchurch Tuesday 3 May, 2.00pm - 4.00pm, Square Affair Suite, Wellington Town Hall, Civic Square, Wellington

The Government has already signed an Agreement with gold mining company OceanaGold and the New Zealand Refining Company, and is in negotiations with ACI Glass Packaging, Carter Holt Harvey, Fletcher Building, New Zealand Aluminium Smelters, Newmont Waihi, and Norske Skog Tasman.

Although the firms currently in the NGA process are larger industry players, the NGA policy is open to firms of any size who meet the criteria.

The Ministry for the Environment’s Climate Change Office takes applications from firms or industries seeking NGAs and assesses their eligibility.

Further information on the application process for NGAs is available on the New Zealand Climate Change Office’s website www.climatechange.govt.nz.


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