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Climate Change Policy: Early Directions

Climate Change Policy: Early Decisions And Directions

New Zealand’s domestic climate change policy will focus initially on energy efficiency measures, with work continuing on more complex economic and regulatory options, Minister of Energy Pete Hodgson said today.

Mr Hodgson, the Convenor of the Ministerial Group on Climate Change, released Cabinet papers today relating to early decisions and directions on a climate change action plan.

The Government intends to consult widely as it develops the details of the plan.

Development of the plan will enable New Zealand to ratify the 1997 Kyoto Protocol to the United Nations Framework Convention on Climate Change by mid-2002. The Protocol obliges New Zealand to stabilise its greenhouse gas emissions at 1990 levels, on average, over the period 2008 to 2012.

Mr Hodgson said the Government's first priority was to revive efforts to reduce emissions by improving energy efficiency.

“Energy use, excluding transport, accounts for about 20% of New Zealand’s total greenhouse gas emissions. Energy efficiency measures can be implemented quickly and they bring multiple benefits without economic loss.

"The Energy Efficiency and Conservation Authority (EECA) programme is being revitalised, with a national energy efficiency and conservation strategy being developed,” Mr Hodgson said. "The strategy will comprise a range of energy efficiency and renewable energy initiatives, including education, information provision, energy performance standards, energy performance labelling and assistance for renewable energy projects.

Recent measures improving energy efficiency include increased funding for public transport and new energy efficiency requirements in the Building Code.

The first minimum energy performance standards will apply to fluorescent lighting and hot water cylinders, with further proposals for standards and energy performance labelling to be considered later this year. The Government is also looking for opportunities to show leadership by improving public sector energy performance, for example in vehicle fleet and building management.

Other early steps include preparation of public education material on energy efficiency options, investigation of opportunities for business and economic development arising from the climate change response, and assessment of gains from waste management and road transport initiatives already in progress.

The more complex economic and regulatory measures under examination include:

 A carbon charge. If there is a decision to include a carbon charge in a climate change package, the work will be forwarded to the Tax Review process. (Tax change proposals emerging from the review would not be implemented until after the 2002 general election.)
 Industry agreements on emissions reduction. Existing voluntary agreements covering major greenhouse gas emitters (about 15% of total national emissions) expire in December 2000. New agreements could be developed and some pilot trading between emitters could emerge as a result.
 Forward trading in emission units. Emitters would be required to ensure they had enough units of New Zealand’s assigned emission amount to ‘cover’ their emissions. They would have the choice of reducing emissions, if necessary, or buying additional units.

New Zealand also continues to participate in international negotiations over the development of rules for international emissions trading and the assignment of credit for carbon ‘sinks’ – primarily plantation forests, which absorb carbon dioxide.

“New Zealand will participate in any international emission trading system that has environmental integrity and that is the focus of our contribution to the negotiations,” Mr Hodgson said. “Meanwhile the design of a domestic trading system will involve careful consultation with emitters and other stakeholders.”

Mr Hodgson said the Cabinet papers released today were being made public in the interests of open government. He hoped their availability would help the development of an informed debate on climate change policy.

Ends

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