Under the Kyoto Protocol, New Zealand agreed to reduce its greenhouse gas emissions back to 1990 levels by 2012 or pay for any excess.

The Emissions Trading Scheme (ETS) is the price-based mechanism established by Government to reduce our net greenhouse gas emissions and comply with the Kyoto Protocol obligations. The ETS is a key part of the Government’s climate change policy.

The Government has chosen the ETS as the least-cost way of putting a price on emissions and thereby creating an incentive for both businesses and consumers to change their behaviour in order to reduce greenhouse gas emissions.

The ETS attempts to move the cost of emissions onto those who cause them. It creates a market around reducing emissions. The ETS encourages people and businesses to:

•  reduce emissions

•  invest in clean technology and renewable power generation, and

•  plant trees

The Ministry for Primary Industries (MPI) administers the scheme for the Forestry and Agriculture sectors, in conjunction with the Ministry for the Environment and Ministry of Economic Development. Forestry was the first sector to enter the ETS, effective 1st January 2008, and Agriculture is set to enter the scheme in 2015.

MPI have produced several guides which provide more detailed information about the ETS. These guides are available to be downloaded at: http://www.mpi.govt.nz/news-resources/publications?keywords=ETSF