New Zealand’s government will introduce a carbon emissions trading scheme from July 1, even after Australia scrapped its own plan last month, Prime Minister John Key said in an interview on Television New Zealand.
The plan will cost households NZ$3 ($2) a week and is expected to raise the cost of petrol by three cents a liter and increase electricity prices by 5 percent, Key said in an interview on TVNZ’s Breakfast program today.
“The question is for a household, are they prepared to pay $3 a week for the insurance premium of our environment, and I think the answer to that is ‘yes,’” Key said. “We’ve got a very modest ETS.”
Australia’s government last month shelved its carbon- trading plan until the end of 2012, the end date for the Kyoto accord on climate change, following the failure of about 190 countries to reach a binding treaty on greenhouse gases at United Nations talks in Copenhagen last year.
Even without an international agreement, countries like the U.S. and China are working to reduce emissions, Key said. Without its own plan, New Zealand goods would “likely” be rejected overseas, he said.
“If our goods were blocked going into international markets or if we weren’t seen to be playing our part when it comes to climate change, I think that would be bad for us,” Key said. “Of the 38 countries that signed the Kyoto protocol, 29 of them have an ETS.”
The New Zealand opposition Labour Party’s energy spokesman Charles Chauvel criticized the government’s plan on the grounds it would raise electricity prices too high for poorer households.
“An ETS is meant to price the use of carbon,” Chauvel said in a statement on the Labour Party’s website today. “Labour’s ETS would have provided transitional relief for low and middle income households.”
The government will use revenue from the carbon trading scheme for planting trees, Key said. New Zealand is spending NZ$1.6 billion over the next five years on tree-planting, NZ$600 million of which will come from carbon revenue, he said.
