New Zealand Cabinet ministers have already considered and dismissed putting a floor price on carbon permits in the emissions trading scheme, even though the issue is part of the ongoing ETS review, according to a confidential Treasury document.
The Treasury briefing was written on Nov. 6 last year, less than three weeks before the government launched its ETS review and published an accompanying discussion document as part of a public consultation process.
The briefing was released last week under the Official Information Act, NZ-based Carbon News reported.
The briefing said: “The discussion document also includes a section on the benefits and costs of adding a price floor to the ETS. Treasury understands that Ministers have discussed the option of a price floor and may not have wanted to consider this option further.”
The discussion document argued that a price floor would provide emitters with more clarity on future carbon prices, something foresters in particular have called for, but also warned about how it could push up compliance costs for emitters as well as the government.
Low NZU prices since the value of UN offsets collapsed in 2011 have contributed to making the NZ ETS an inefficient tool to cut greenhouse gas emissions, a recent government survey found.
The government will continue to accept public comments on a price floor and other review issues until Apr. 30. Consultation on the two primary issues in the review – the 2-for-1 provision and the NZ$25 price cap – closed earlier this month.
By Stian Reklev – email@example.com