Climate change initiatives are subject to major review. New Zealand ratified the Kyoto Protocol in December 2002 following the enactment of the Climate Change Response Bill. Key elements of the climate change response included a carbon emission charge, negotiated greenhouse gas agreements (NGAs) for at-risk industries and a bid-in Projects mechanism. Through to the end of 2005, several large industries had negotiated NGAs and a number of renewable energy projects (including geothermal projects) had benefited from the Projects carbon credits. In June 2005, following a revised projection of New Zealand’s greenhouse gas emissions during Kyoto first commitment period, a full review of climate change incentives was commissioned (see external site). The results of the cross-departmental review were announced in December 2005: the review questioned the true benefits of the overall climate change policy package.
Climate change initiatives were impacted by the election of a new Government in September 2005. One of the implications of the new balance of power was that it was no longer expected to be possible to pass legislation related to implementation of a carbon charge, so this portion of the climate change package has been dropped. It is still possible that a limited form of carbon charge may be suggested for the electricity industry, in which case it may negatively impact on geothermal generation (see external site).
The Resource Management (Energy and Climate Change) Amendment Act was passed in 2004 and resulted in greater emphasis to climate change and energy matters, particularly the benefits of renewable energy, in Resource Management Act planning and decision making. Geothermal energy was specifically included in the definition of renewable energy.