WELLINGTON, New Zealand, July 1 (UPI) -- The New Zealand government introduced an emissions trading scheme Thursday with the aim of reducing greenhouse gas emissions.
"The ETS is the most efficient and least cost way to bring emissions under control, meet our international obligations and protect New Zealand's clean, green brand," said New Zealand's Climate Change Minister Nick Smith.
The scheme would reduce New Zealand's emissions by 19 million tons by 2012, the government says, and drive investment in renewable electricity, forestry and energy efficiency.
Under the plan, companies would trade carbon credits referred to as New Zealand Units.
Industries that are net creators of carbon such as transport fuels, electricity production, synthetic gases, waste and industrial processes are required to purchase the units from the New Zealand government or from sellers whose businesses absorb carbon, such as those that plant trees.
These units can be traded internationally with other countries implementing a similar scheme under the Kyoto Protocol
New Zealand's forestry sector has already been covered by an ETS for two years. Agriculture will enter the ETS in 2015 but some farmers are hoping a review of the program in 2011 will help them to avoid accountability.
"New Zealand's emissions per person are among the highest in the world and are growing at one of the fastest rates among developed countries," said Smith.
He said it is the first such scheme to be introduced outside of Europe. Neighboring Australia shelved its proposed ETS in April.
Last August the New Zealand government announced that it aims to reduce greenhouse gas emissions between 10 and 20 percent below 1990 levels by 2020.
The country's emissions -- nearly half of which come from agriculture -- have increased by 25 percent over the last 20 years.
The government estimates the average family would pay an additional $165 each year for oil and electricity as a result of the ETS.
Power companies Contact Energy and Mercury Energy said they would raise their electricity prices by 3.2 percent and 3.3 percent, respectively.
But other major utilities, including Trust Power, Genesis Energy and Meridian Energy said they would wait to review the impact of the scheme before making any pricing decision.
Non-profit consumer group Consumer New Zealand, said it recognized the need for some kind of emissions trading scheme, "but we think this one is going to leave consumers and the environment short-changed," said its chief executive Sue Chetwin.
Taxpayers would pay hundreds of millions of dollars in subsidies to businesses because of the scheme, she said.