Public views sought on emissions trading law

The government is calling for submissions on proposed law changes that will make it easier for an emissions trading market to operate in New Zealand.

Commerce Minister Lianne Dalziel says the proposals in the Emissions Units, Settlement Systems and Futures Bill are an important addition to New Zealand’s response to the challenge of climate change.

“Efficient carbon markets will enable people to decide how best to adapt their behaviour to reduce greenhouse gas emissions”, Lianne Dalziel said. “They may choose to become more efficient themselves, or use the market-mechanism to purchase emissions units from others.”

“Initially the impetus for the Bill was to facilitate the efficient trading of emissions units. Now however, it has developed to the extent that it will also improve the operation of financial markets generally.”

Lianne Dalziel says engagement with the private sector has highlighted the need to make changes to New Zealand securities laws to ensure the market is up to date with international best practice.

“The changes will make New Zealand more attractive to international participants, including banks, investors and financial institutions which are starting to enter into emissions trading activities.”

The proposed reforms include: Amendments to ensure the appropriate legal treatment of emissions units Rationalising the regulatory framework for registering securities and futures exchanges Amendments to the Reserve Bank of New Zealand Act 1989, so that the approval and oversight of designated settlement systems better conform to international best practice. Amendments to the Personal Property Securities Act 1999 which: gives the buyers of these emission units protection in the event that the units are subject to a prior security interest And provides the operators of some designated settlement systems certainty in relation to realising collateral in the event of a default by a clearing participant.

“We look forward to continuing to work actively with New Zealand firms who, like the Labour-led government, are committed to making New Zealand the world’s first truly sustainable nation,” Lianne Dalziel said.

The closing date for submissions is Monday 10 March 2008. The Emissions Units, Settlement Systems and Futures Bill is expected to be introduced in the first half of this year.

The public discussion document and accompanying Bill can be found at http://www.med.govt.nz/templates/MultipageDocumentTOC____33704.aspx

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