Energy sector welcomes Government restraint in updated ETS settings

Energy Resources Aotearoa has welcomed the Government’s updated unit and price control settings for the Emissions Trading Scheme, saying they preserve stability and predictability in our flagship tool to tackle climate change.

Chief Executive John Carnegie says:

"We are heartened to see the Government has roundly rejected the Climate Change Commission’s proposed cost containment reserve of $170 in 2023. Our analysis showed that allowing prices to push this high would put an even greater financial burden on households at a time when they can least afford it."

Carnegie says that today’s announcement will ensure the ETS is allowed to continue doing its vital work as the New Zealand economy transitions toward net zero carbon emissions.

"New Zealand is lucky to have one of the most comprehensive emissions trading schemes in the world. Over time, a rising ETS price will drive cleaner choices when it comes to households and businesses’ transport and energy use."

Carnegie says there will always be a temptation for politicians to tinker with ETS settings to try and get immediate results, but that patience and stability is what is required.

"The transition to net zero by 2050 is a marathon, not a sprint. New Zealand is playing its part, but we need to ensure we don’t move so fast we leave our most vulnerable people behind or undermine the international competitiveness of our business sector.

"It’s important to remember that every additional dollar on an already high carbon price is an impost on households and businesses.

"A stable, predictable ETS is a critical lever to deliver a just transition, and we applaud the Government for preserving this in today’s announcement.

"We look forward to working with the Government to ensure the ETS is given the space to do its job."