The Emissions Trading Scheme (ETS) could become law later this week or early next week. This scheme is a plan to cut greenhouse gases by making businesses pay for their carbon dioxide emissions, that is the CO2 which they put into the air. There will be a limit and if they go above the limit, they can buy credits from businesses that don’t put out much CO2. That’s why it’s called a trading scheme; businesses trade in greenhouse gases. At the moment, CO2 is the only gas in the scheme but later other greenhouse gases will probably be included.
One example is businesses which are involved in forestry. They will get money for planting trees but if they cut down their trees to use the land for farming, they will have to pay.
The ETS will cost all of us money in the future. Electricity will be part of the ETS in 2010. Any electricity from coal or gas will have to buy credits. Our electricity prices will go up. In 2011, transport will join the ETS; fuel prices will go up for car owners but more importantly, truck drivers will pay more and will add the cost to goods they carry. In 2013, agriculture will join the scheme.
New Zealand is not the first country to bring in an Emissions Trading Scheme. Australia announced their scheme recently, and the UK, the EU and parts of the US have already begun on an ETS.
The New Zealand ETS Bill had its second reading last Thursday and was passed 63 votes to 56. The Green Party and New Zealand First agreed to support the Labour Party to pass this Bill. Quite a few small changes to the Bill are needed and Parliament should deal with those changes this week. After the Bill has the third reading in Parliament, it will be passed and become law. Parliament is ‘in urgency’ at the moment which means the MPs are working from 9am to midnight. Very soon, maybe next week, Parliament will finish and MPs will begin to get ready for the election. Helen Clark has not yet announced the date of the election but it must be by November 15th. Many people think the date will be November 8th but it could be earlier.