New Zealand ETS versus TEQ
The primary purpose of an Emissions Trading Scheme (ETS) and a Tradable Energy Quotas (TEQ) system is to reduce a country’s greenhouse gas emissions. The New Zealand ETS system is essentially a “Cap and Trade” system.

There is an enormous proliferation of information available in peer reviewed publications, reports, newspapers, websites, and videos on the pros and cons of different systems set out to achieve the same above purpose. One can become embroiled and overwhelmed by the complexities of the debate. To cut to the chase, there are three main components of each alternative system or hybrid system – efficiency, effectiveness, and equality.

Efficiency is concerned with the cost of setting up the system.
Effectiveness is concerned with whether the system works or not and the rate of reductions in greenhouse gas emissions.
Equality is concerned about who carries the costs and whether the impact of the system is equally shared or not

Value judgments play a large part in deciding which components of a system are most important. From SCAN’s point of view, effectiveness must come first before efficiency. Greenhouse gas emissions must be reduced as quickly as possible so as to avoid the risks of triggering irreversible climate change.

The effectiveness of an ETS is based on raising the price of carbon, the impact of which filters through an economic system and raises the price of all goods and services which depend on the use of fossil fuels. It is the wealthy in each country who have contributed the highest levels of greenhouse gas emissions due to their highest levels of consumption and it is the wealthy in each country who are best able to absorb increasing costs of goods and services. A TEQ is a rationing system which ensures that each citizen makes an equal contribution to reducing greenhouse gas emissions. SCAN takes the stance that the urgency to reduce greenhouse emissions should be on a war time fitting. Market place prices signals alone during WWII would not have provided the same result as the rationing systems which were implemented. 

SCAN’s above banner claims that the New Zealand ETS system has failed and still fails. New Zealand’s greenhouse gas emissions have continued unabated in the past under a previous ETS system and the current New Zealand government, the Labour Party which has a clear majority, has ignored the Climate Change Commission’s recommendations to set an effective price on carbon in New Zealand’s revised ETS system.

SCAN firmly supports the implementation of a TEQ system to replace our current ETS system as being a superior system in terms of necessary effectiveness and equality. Whether an ETS system is more efficient than a TEQ system remains debatable.

For further information in the interim, please read the following links: 

New Zealand Emissions Trading Scheme – Wikipedia – link here

Tradable Energy Quotas – Wikipedia - link here
On 3rd March 2023, SCAN joined a Climate Action Rally held in the Octagon of Dunedin City, New Zealand. One of our banners stated:

Tradable Energy Quotas (TEQs)
Is a superior system

To find out more: