This page provides an overview of the New Zealand Emissions Trading Scheme.
Aim of the NZ ETS
The New Zealand Emissions Trading Scheme (NZ ETS) is the Government’s principal policy response to climate change. It supports global efforts to reduce greenhouse gas emissions while maintaining economic productivity.
How the NZ ETS works
The NZ ETS puts a price on greenhouse gas emissions. This provides an incentive for people to reduce emissions and plant forests to absorb carbon dioxide.
Certain sectors are required to acquire and surrender emission units to account for their direct greenhouse gas emissions or the emissions associated with their products.
An emission unit represents one metric tonne of carbon dioxide, or the equivalent of any other greenhouse gas (carbon dioxide equivalent). There are lots of unit types and a variety of emission units are traded throughout the world.
For an introduction to the NZ ETS watch this video [You Tube video 3.57 minutes].
Impact on households and businesses
The NZ ETS does not require households to trade emission units. However, households will feel some of the effects of the scheme as the sectors that are involved pass their costs on to households.
Most businesses in New Zealand will also not be required to trade emissions units. The Government's Climate Change Information website has more information about the NZ ETS including information about how the NZ ETS will affect you.
Review of the NZ ETS
The Government is reviewing the NZ ETS to determine how it can best support New Zealand in both meeting its climate change targets and transitioning to a low emissions economy.
The Ministry for the Environment invited feedback on how the NZ ETS is working and how it might work better in future. Submissions closed on 30 April 2016 and are now being analysed.
For more information on the review see About the New Zealand ETS review 2015/16