Climate Change Response Act is a Major Step

Media Release

14 November 2006

Climate Change Response Act is a Major Step

PricewaterhouseCoopers is pleased the Government has enacted the Climate Change Response Amendment Act 2005 on 9 November 2006. The leader of Climate Change Services at PricewaterhouseCoopers, Julia Hoare, said it was “a major step” as New Zealand moves toward price based measures for carbon and the establishment of the Permanent Forest Sink Initiative.

The original legislation – the Climate Change Response Act – was enacted in 2002 with the purpose of enabling New Zealand to meet its obligations under the Convention for Climate Change and the Kyoto Protocol.

Julia Hoare said that since 2002, there have been a number of changes to the operational rules that sit underneath the Protocol.

“The amendments announced on Thursday are the legislative response to these rule changes,” she said. “The upshot is that the administrative infrastructure necessary to facilitate NZ companies' participation in the international carbon market has been refined and that is a good move.

“This amending Act paves the way for New Zealand companies to participate in an exciting new market which has seen spectacular global growth in recent months.”

A recent survey by the World Bank and the International Emissions Trading Association puts the total value of transactions in the carbon market in the first nine months of 2006 at US$22 billion – approximately twice the GDP of Laos – and up from US$11 billion for the whole of 2005.

The detail of how many of the changes will work in practice will be contained in regulations which are yet to be issued by the Government.

The Kyoto Protocol Registry

The original Act established New Zealand’s Kyoto Protocol Registry to record holdings and transfers of the units that represent New Zealand’s target allocation for greenhouse gas emissions. The Act also established a national inventory agency to record and report information relating to greenhouse gas emissions.

The amendments provide greater clarity around the operation of the Registry, and mechanisms will be in place to achieve the following:

- businesses and individuals will be able to hold accounts in the Registry;

- the Government will be able to transfer emission units to New Zealand businesses and individuals; and

- businesses and individuals will be allowed to trade in emission units.

Julia Hoare said clarifying these areas was “a key prerequisite” for effective participation by New Zealand companies in the international carbon market.

She said it would also be seen as a positive move by some companies across the Tasman. “It may give Australian companies the confidence to use New Zealand as a carbon market entry point and drive Australian clean technology investment into our markets.”

ENDS

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