Information obtained by the No Right Turn blog under the Official Information Act has shown New Zealand’s new Emissions Trading Scheme, passed to help New Zealand meet its commitments under the Kyoto Protocol, to be a corporate welfare scheme, “rather than a pollution reduction scheme.” The government will be allocating 93 million carbon units, primarily to the forestry and industrial sectors, during the first compliance period (CP1). Yet when transport enters into the scheme in two years time the the total demand from included sectors over CP1 is only 61 units. Meaning that the government is massively over allocating,

with the result that the market price for carbon will be low, and there will be little pressure on polluters to reduce emissions. Meanwhile, that extra 40 million units - almost a year’s net emissions - will be sold on the international market, worsening [New Zealand’s] net position and funnelling over $800 million into the pockets of favoured industries

When New Zealand ratified the Kyoto Protocol in 2002 it was expected to become a carbon creditor nation thanks to the increase in forestry since 1990, creating “carbon sinks” which would generate units additional to the country’s initial allocation. However 2005 forecasts showed New Zealand more likely to be in a carbon deficit, requiring credits from other countries. Under the Emissions Trading Scheme however, it appears that a few industries will benefit financially, without pollution being reduced.

Today also begins the implementation of the Government’s biofuels sales obligation policy; 0.5% of the combined petrol and diesel sold by fuel companies over the next year now has to be biofuel, making (slightly) more of the country’s energy renewable. However, Chevron New Zealand, which operates Caltex petrol stations, says it can’t start building the infrastructure needed to import the fuels until the policy is guaranteed to remain in the future. The National Party has stated it will scrap the policy if it’s elected in next months election.