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From 2007, New Zealanders will pay NZ$15 for emitting a tonne of carbon dioxide or its equivalent in other gases.

The world's first "true" carbon tax, which was announced on 4 May, won't have much impact on the country's greenhouse-gas emissions by itself. But environmentalists have heralded it as a step in the right direction.

"It may be small but it is significant," says Martijn Wilder, head of the climate change group at the international law firm Baker and McKenzie. "The New Zealand government is prepared to put a price on carbon, while many other countries outside Europe are still squabbling about it." A few European countries have introduced what are often referred to as carbon taxes, but they are not applied to all fossil fuels or based on quantity of CO2 emitted.

The tax is expected to add NZ$208 (US$152) per year to the average household's bills. The aim is to change behaviour, so that when someone buys a fridge or a car, say, they may reflect more on energy or efficiency, says Pete Hodgson, convener of the government's ministerial group on climate change.

Disappointingly for some greens, companies can opt out of the tax in return for a binding commitment to adopt the world's best practice for emission management in their industry. The idea behind this tax break is to prevent "carbon leakage" - companies moving offshore to avoid carbon sanctions. This may result in job losses, but won't reduce emissions overall.

From issue 2499 of New Scientist magazine, 14 May 2005, page 4

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