Government set to close carbon market loophole
Wednesday 24 Feb 2021Government rushes to patch $90m hole in carbon market - The Government is rushing to fix a gaping loophole that exposes New Zealand's carbon market, the Emissions Trading Scheme, to major market manipulation.
The Government is exposed to $360 million in financial risk over the next year due to a loophole in the rules governing New Zealand's carbon market, the Emissions Trading Scheme.
The existence of that hole is a result of an error in the drafting instructions sent to the Parliamentary Counsel Office when the Scheme (ETS) was amended last year, Climate Change Minister James Shaw told Newsroom.
Although Shaw was initially advised that the risk to Crown accounts was low, he said media attention around the loophole meant that advice had changed. Now, the Government has introduced an amendment to Parliament under urgency, set to pass ahead of the first ETS auction on March 17 – at which the Government could lose out on up to $90 million.
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