New Zealand Emissions Unit Prices Tumble On Climate Law Changes
JustinNew Zealand carbon unit prices tumbled after the government announced changes to climate laws that could erode confidence in the nation's Emissions Trading Scheme.
New Zealand carbon unit prices tumbled after the government announced changes to climate laws that could erode confidence in the nation's Emissions Trading Scheme.
The changes include removing the need for the Climate Change Commission to provide independent advice on emissions reduction plans, or to consult the public, Climate Change Minister Simon Watts said in a statement. The government is also removing the requirement for settings in the ETS to align with its targets under the Paris Agreement to limit global warming to 1.5C above pre-industrial levels.
"These proposed changes will reduce costs to government and business and provide greater certainty, enabling us to make meaningful reductions more efficiently," said Watts. "They do not lower our ambition."
However, New Zealand emissions units slumped 10% Wednesday to NZ$46.40 — the lowest since May last year. Their decline reflected "negative sentiment following the government's announcement, which was viewed as unsupportive of a credible ETS," investment bank Jarden said in an emailed note.
The changes, which will be enacted next year, have been greeted with skepticism by political opponents and commentators, who say it is the latest government move to signal a potentially softer stance on emissions reductions. Last month, policymakers adopted a less ambitious methane-reduction target based on a controversial "no additional warming" approach and also relaxed climate reporting rules citing the impact on business.
"This is worrying news, consistent with the recent announcements to lower methane emissions reduction targets," said James Renwick, professor of physical geography at Victoria University in Wellington. "It sends a clear signal that this government is not serious about domestic emissions reductions."
Removing the commission's role in providing advice does away with one of the fundamental reasons for having the agency in the first place, Renwick said. Decoupling ETS settings from New Zealand's so-called nationally determined contribution, which are the targets under the Paris Agreement, suggests the government is making it easier to weaken domestic action, he said.
The opposition Green Party was more scathing, with co-leader Chloe Swarbrick labeling the moves the government's "most significant destruction of climate action yet."
