Contact supports announcement on carbon market

8 May 2007

Contact supports announcement on carbon market

Contact Energy welcomed today’s Government commitment to developing a ‘cap and trade’ system for reducing greenhouse gas emissions but noted detail around the allocation and sale of carbon credits would be critical to the success of the scheme.

Contact’s General Manager of Corporate Affairs, Bruce Parkes, said early European carbon trading models had over allocated carbon credits which led to little effect in net emissions reductions.

“It is important that carbon credits are allocated at a level which gives them real value and which will drive emissions reductions as a result.

“Contact believes the cost of carbon emissions should be met by those who produce them and that the price of carbon must be reflected across all sectors of the economy. We are pleased to see these principles reflected in the Government’s announcement today,” he said.

Mr Parkes said as a general principle, once carbon credits had been allocated by sector they should be auctioned in a contestable process rather than allocated to existing emitters through a process of ‘grandfathering’.

“An auction process for carbon credit allocations would create a level playing field and allow a genuine market-based price to emerge for the credits,” he said.

Mr Parkes said Contact would continue to participate in the policy development process, and in the work being led by the NZX to establish a company to trade in New Zealand carbon credits.

ENDS

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