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Second thoughts about a New Zealand ETS ?

- Thursday, June 18, 2009

The New Zealand economic consultancy NZIER has just released the results of some economic modelling it has carried out for the NZ Government of alternative approaches for New Zealand in meeting international greenhouse emission reduction obligations.

The modelling concluded that, in an initial period when the rest of the world will not have implemented emission mitigation policies, the ‘best’ short-term option for New Zealand in meeting its Kyoto Protocol obligations may be for the New Zealand Government to purchase international emission credits, rather than implementing an emissions trading scheme.

The second conclusion from the study was that to a large degree, the impact of an ETS on New Zealand (where 50% of emissions come from agriculture) depends heavily on what action is taken by the rest of the world. The report also suggests it may be advisable to exempt agriculture from participation in the ETS, given the relatively high administrative costs associated the inclusion of farms in the scheme.

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