New Zealand first to levy carbon tax

New Zealanders will pay an extra NZ$2.90 (£1.11) a week for electricity, petrol and gas when the country becomes the first in the world to introduce a carbon tax to address global warming.

It is expected to add about 6% to household energy prices and 9% for most businesses but will help the economy in the long run, according to Pete Hodgson, the minister responsible for climate change policy.

Mr Hodgson set the tax yesterday at NZ$11 a metric tonne of carbon emitted. It will come into effect in two years. "If we are going to tackle climate change, we need to start taking environmental costs into account in the economic choices we make," he said.
The tax, planned after New Zealand signed up to the Kyoto protocol, would make polluting energy sources such as coal and oil more expensive than cleaner ones such as hydro, wind and solar, he said.

A government spokesman said the tax would have long term benefits for the economy: "If New Zealand does nothing _ our emissions will continue to rise as will the future cost of reducing them. If we can curb our growth in greenhouse gas emissions now, we will be better placed to make a smooth transition to more challenging commitments after 2012."

Other countries, especially in Europe, have energy taxes which are weighted against producers but New Zealand is believed to be the first to ask the public to pay directly for the costs of reducing global warming. Proposals for a Europe-wide carbon tax were abandoned in the 90s.

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http://www.guardian.co.uk/climatechange/story/0,12374,1476775,00.html