Market News

 July 23, 2009
NZ says tough to set 2020 carbon reduction target

 * New Zealand to announce 2020 emissions target in August
* But committing to deep cuts will be tough, minister says
* Aim is to finalise emissions trading scheme by December

Wellington, New Zealand - New Zealand's growing carbon emissions makes setting a reduction target for 2020 a tough task, the government said on Thursday, while it sees a trading scheme as the best means of fighting climate change.

Data showing New Zealand's total emissions increased 24 percent from 1990 to 2008, has highlighted the scope of the challenge in setting a target for 2020, Climate Change Minister Nick Smith said.

"I'm certainly concerned that New Zealand's track record of emissions increases over the last 18 years is going to make it difficult for New Zealand to have a bold target relative to 1990," Smith said.

The government has pledged to set a 2020 emissions target by the beginning of an Aug 10-14 U.N. climate change meeting in Bonn, part of a number of negotiating sessions aimed at trying to agree on a broader pact to replace the Kyoto Protocol.

Those negotiations are scheduled to reach a conclusion during a major U.N. conference in December in Copenhagen and rich nations are under pressure to commit to deep 2020 emissions cuts as part of any new climate agreement.

The government has just completed a series of meetings with the public and businesses, with the main message that climate change is a pressing issue, Smith said. The government is also reviewing the country's emissions trading laws, with a parliamentary committee expected to release its report within a few weeks.

"A financial instrument in the form of an emissions trading scheme is the most important tool the government has to efficiently reduce greenhouse gas emissions," Smith said.

The government's aim was to finalise the scheme by the Copenhagen meeting, a target which was tough but achievable.

Smith said he was talking with his counterpart in Australia, Penny Wong, about harmonising New Zealand's scheme with the one awaiting approval by the Australian Senate.

New Zealand created an emissions trading scheme late last year, but the scheme was almost immediately put under review after the centre-right National-led government took power following a general election in November.

The government's series of public meetings held earlier this month produced agreement on the seriousness of fighting climate change, but also a wide range of responses on how to tackle the problem.

"It's very clear from the meetings that New Zealanders take climate change seriously, and want a response from government that will constructively contribute to an outcome at Copenhagen," Smith said.

Under the Kyoto Protocol, New Zealand's emissions are supposed to be held at 1990 levels in the pact's first commitment period from 2008-2012.

The government has previously said its target is to halve emissions from 1990 levels by 2050. (Editing by David Fogarty)

By Adrian Bathgate (Reuters)