4 May 2005

Contact Energy Welcomes Certainty Of NZ$15 Per Tonne Carbon Tax

Contact Energy welcomed confirmation that the Government’s carbon tax will initially be set at NZ$15 per tonne of carbon, as announced today by the Hon Pete Hodgson, Convenor of the Ministerial Group on Climate Change.

Contact Energy chief executive Steve Barrett said that confirmation of the level of the future carbon tax, which will take effect from April 2007, clarifies an important factor in planning for New Zealand’s future energy needs.

“Confirming the level at $15 per tonne provides welcome certainty on the relative impact of the carbon tax on available energy options.

“The actual impact of the carbon tax on electricity prices will not become clear until it is introduced in two years’ time. Competitive and market factors, as well as today’s announced level of the carbon tax, will be important factors on the actual price impact at that time.”

Mr Barrett also welcomed the Government’s intention that the carbon tax regime be an interim precursor to a full emissions trading scheme.

“An emissions trading scheme is a preferable long term approach because it would provide a more transparent and economically efficient mechanism for rewarding the reduction of greenhouse gas emissions than a one-size-fits-all carbon tax.”

ENDS

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