Rick Wilkinson
OGJ Correspondent
MELBOURNE, Nov. 19 -- The newly elected National Party-led New Zealand government headed by Prime Minister John Key has signaled it will review the country's Emissions Trading Act that was put into legislation by the previous Labor government led by Helen Clarke.
Key also signaled that the introduction of a carbon tax instead of, or in conjunction with, an emissions trading scheme will also be discussed.
The news has prompted the Petroleum Exploration and Production Association of New Zealand to say that it is the best outcome the industry could have hoped for from the new government.
"It means we aren't tied to tinkering with an emissions trading scheme that in our view has serious flaws," says PEANZ executive director John Pfahlert.
Pfahlert says the most likely outcome is a hybrid scheme such as an emissions trading scheme for large industries exposed to international trade and a carbon tax for all the other sectors of the New Zealand economy.
He said a low-level carbon tax would be simpler to administer, and it would have lower compliance costs than an emissions trading scheme. He believes the final scheme should be fiscally neutral. It might even include some alignment with Australia.
The Clarke-led Labor government had originally proposed that all sectors, including the mining industry and oil refiners and gas industry, be covered by an emissions trading scheme from 2013. It later said the free allocation of carbon units would be extended for 5 years to 2018.
