- Hon Simon Watts
The Government is strengthening the market governance of New Zealand's Emissions Trading Scheme (ETS), Climate Change Minister Simon Watts says.
"A credible ETS is our most powerful and cost-effective tool to drive down net emissions across the economy. But to do its job, the ETS must have good market governance in place. That's exactly what these changes are about.
"Talk about changing market governance settings has been happening for years. This Government is committed to a credible ETS-led approach to reducing emissions, so is now turning talk into actions."
Key changes include:
- Requiring trading platforms to report and record price and volume data to the Ministry for the Environment.
- Requiring market participants to record trading information into the ETS Register.
- Introducing market conduct obligations into the Climate Change Response Act, prohibiting price manipulation and misleading conduct.
- Allowing monitoring agencies to obtain information from market participants and share relevant information with each other.
"These changes have been carefully designed to address risks without adding unnecessary costs or red tape. We've deliberately avoided more expensive options like creating a government-run exchange or clearing house which was considered by the last Government," Mr Watts says.
"New Zealand is lagging behind other countries with an ETS when it comes to market oversight.
"Right now, there is limited visibility to much of our ETS trading. This makes our market vulnerable to market misconduct risks such as price manipulation.
"These changes will help align us with our international peers but won't disrupt New Zealand's established ETS market practices."
The changes will be likely introduced alongside other potential amendments to the Climate Change Response Act before the end of the year.
