Go-slow on carbon credit overhaul

The Government has unveiled changes to the contentious emissions trading scheme (ETS), including temporarily keeping the price of carbon credits at $25 a tonne.

The review follows New Zealand’s signing of the Paris climate change agreement, which replaces the Kyoto protocol.

Two major concerns about New Zealand’s scheme have been the exclusion of agriculture from the list of polluters, and access to cheaper foreign carbon credits, which at one stage pushed the cost of New Zealand credits down to 14 cents.

Climate Change Minister Paula Bennett said the finer details of her package would be worked out over the next 12 to 18 months.

But in principle, the Government wanted to introduce auctioning of carbon credits, and limit the use of international credits when the scheme reopened to international markets.

It also wanted to eventually have a ‘‘different’’ price ceiling than the current fixed price of $25.

However, for the moment it was business as usual, with no change to the current price ceiling until either an auctioning system or links with international markets were established.

Credits would also continue to be freely allocated until at least the end of 2020, so that big emitters were not disadvantaged compared to their international rivals.

Further consultation would be allowed before the decisions were implemented.

Catherine Leining, a research fellow at thinktank Motu, said the proposals ‘‘have potential to shift New Zealand onto a low-emission pathway, but only if they are implemented well’’.

Until more was known, the uncertainty which had plagued the carbon credit system since 2012 would continue, she said.

Professor Euan Mason, of Canterbury University’s school of forestry, was more critical, saying it would be ‘‘the nail in the coffin of our ETS’’.

He said carbon credits with ‘‘no environmental credibility’’ would continue to be bought by polluters.