Emissions trading must continue to evolve in line with the times.
This year will be pivotal for designing New Zealand’s climate policy portfolio in the lead-up to the Paris Agreement, which kicks off in 2021. Emission pricing has an important role – but not the only role – in New Zealand’s mitigation strategy.
The ETS can help NZ to transition strategically toward net zero domestic emissions while supporting global progress under the Paris Agreement. Under its more flexible (and evolving) carbon market mechanisms, we are unlikely to see convergence of international emission prices toward one that makes sense for New Zealand. In this context, aspects of the NZ ETS design are outmoded and need an update.
Setting aside the issue of agricultural emissions, this briefing presents a “Top Ten” list of alterations to watch for as we outfit the NZ ETS for the important job ahead.