The New Zealand Initiative supports the government’s emissions targets, including commitments under the Paris Climate Agreement and to net zero emissions of long-lived greenhouse gases from 2050. We consider the New Zealand Emissions Trading Scheme (“ETS”) is among the world’s leading cap-and-trade systems for reducing greenhouse gases.

The consultation document describes problems clearly, identifies various solutions, and provides a logical assessment of the options. The consultation is timely given recent increases in the ETS price.

We support the focus on protecting public confidence in the ETS through good governance. In our view, the primary constraint on the ETS and other emissions policies is their ability to sustain public confidence and a majority in Parliament through 2050 and beyond. Appropriate governance is essential for the integrity of the system.

We also support MfE’s focus on price discovery. We interpret price discovery as referring to processes which lead to all available information being incorporated in a market price.