Summary Description
- Amends the Climate Change Response Act of 2002 to align New Zealand�s Emissions Trading Scheme with New Zealand's objectives under the Paris Agreement of 50% reduction of net emissions below gross 2005 levels by 2030.
- TopicThe topic of the legislation or policy covered by the text
- Climate & environmental protectionTaxation
- SpeciesThe animal, or type of food production, covered by the text
- Farmed animals
- JurisdictionCountry or geographical area where the text applies
- New Zealand
- Sub-jurisdictionCountry or state where the text applies
- N/A
- Type of ActWhether the act is a law, regulation, or policy, or another type of text
- Legislation
- StatusIndicates whether the act is in force or not
- In force
- Legal ValueWhether the text is binding or not
- Binding
- Date enactedDate the text was adopted
- 2021
- Date updatedDate when the entry was last updated by the CALF team
- June, 2023
- Official citation
- Climate Change Response (Emissions Trading Reform) Amendment Act 2020
Strengths & Weaknesses
- Strengths
- The legislation's scope covers emissions from livestock, and applies to a broad range of greenhouse gases, including Carbon Dioxide (CO2), Methane (CH4) and Nitrous Oxide (N2O).
- The law requires that all farms have a written plan to measure and manage their greenhouse gas emissions by 2025.
- The law further provides an implementation mechanism through an agreement with the agricultural sector called �He Waka Eke Noa� (M?ori prover which means �we are all in this together�). This agreement includes specific mitigation incentives and different pricing for long-term and short-term GHGs.
- The agreement further allows farmers to choose between a farm-level levy and a processor-level hybrid levy. Should this partnership not make enough progress in 2022, the standard ETS mechanism will apply, with livestock emissions to be priced at the processor level.
- Weaknesses
- The law sets a cap on the price that operators must pay for emitting greenhouse gas emissions, and such a cap is often set too high and the price of GHG tonne set too low in light of the environmental impacts and the necessary measures to tackle the climate crises.
- Emissions trade may lead polluters to accumulate �emission units� instead of incentivising them to reduce their emissions. This, in turn, might make it difficult for other actors to enter the market.
- Until 2015 the NZ ETS was linked to the Kyoto Protocol emissions trade, purchasing emission units at low cost, and hinders progress in GHG mitigation and meeting climate goals.