New Zealand introduced an ETS last July with a set pirce of $NZ12.50 ($A9.50) a tonne of CO2. It was the first country outside Europe to introduce mandatory carbon pricing.
New Zealand’s energy mix is different from Australia’s because it uses a lot of hydro and geothermal power. 97% of Australia’s energy comes from fossil fuels and 3% from renewables. Only 71% of New Zealand’s energy comes from fossil fuels.
Agriculture is set to come into the scheme in 2015. This is a big challenge because it produces about half of NZ’s greenhouse gas emissions.
The price rises that followed the introduction of the ETS last July were fairly modest and have been masked in part by steady increases in oil prices. The policy is in good shape with the ETS up and running new investment occuring in forestry and renewable energy and complementary programs delivering record numbers of insulated houses and solar hot water heating systems. It is unlikely the ETS will change if a different political party is elected.