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09/11/2008 08:12 AM     print story email story  

New Zealand Creates Cap-And-Trade System

SustainableBusiness.com News

New Zealand pased a climate change bill yesterday that will set up the first nationwide emissions trading scheme outside of Europe, according to a Reuters report.

The cap-and-trade scheme will begin trading carbon credits in 2009, ahead of Australia's recently-created system, which will begin in 2010. 

The New Zealand system will cover all segments of the nation's economy, beginning with forestry from 2008, transport by 2009, stationary power plants by 2010 and agricultural waste by 2013.

According to Reuters, about 60% of the nation's power currently comes from hydro-electricity, and emissiosn from agricultural--particularly methane from livestock--are responsible for half of the country's greenhouse gas emission.

The carbon trading scheme was created to help New Zealand reach its emissions goals under the Kyoto Protocol, and to put it on course for a goal of carbon-neutrality in the energy sector by 2040.

The bill passed in the New Zealand parliament by a vote of 63-57, a slim margin that took months of negotiating among the minority-led government, the Greens and the New Zealand First parties.

Critics of the plan, have echoed the same arguments made in countries around the world: it is expensive to be a first-adopter; the country's industries will lose competitiveness and the incentive for economic growth; and the price of carbon is too high and volatile. 



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