Emissions trading is a powerful tool for helping to reduce greenhouse gas emissions. An ETS transforms a regulatory limit on emissions into an emissions price set by the marketplace, creating economic incentives for producers, consumers and investors to choose lower-emission alternatives. ;xNLx;;xNLx;When it was introduced in 2008, the NZ ETS was the first emissions trading system in the world designed to cover all sectors of the economy (with phased entry) and the six major greenhouse gases. Across two major stages of amendments in 2009 and 2012, the features have been adjusted to moderate the price - and emissions - impact of the system. However, the system has successfully established a functional domestic market and offers a foundation for more ambitious mitigation effort. The New Zealand government started a third review of the system in late 2015 and has announced a series of changes with more to come. ;xNLx;;xNLx;This timeline explores how the system's scope and ambition have evolved over time alongside changes to the national and international context. You can follow links to key documents associated with each milestone along the way. ;xNLx;;xNLx;This timeline is an information resource for New Zealand policy makers, NZ ETS participants, researchers, and ETS practitioners from other countries who wish to learn from New Zealand’s experience. The timeline focuses on the history of the government policy-making process, rather than the experience of market participants and civil society observers. Comments and additions are welcome. ;xNLx;;xNLx;This timeline was developed by [Catherine Leining](http://motu.nz/about-us/people/catherine-leining/), Policy Fellow at [Motu Economic and Public Policy Research](http://www.motu.org.nz) as part of the programme ["Shaping New Zealand's Low-Emission Future."](http://motu.nz/our-work/environment-and-resources/emission-mitigation/shaping-new-zealands-low-emissions-future/) ;xNLx;;xNLx;Funding support from the Aotearoa Foundation and development assistance from Scott White, Martina Krauss, and Bronwyn Bruce-Brand are gratefully acknowledged. Satellite photos are courtesy of the NASA Earth Observatory. ;xNLx;;xNLx;Note on date conventions: When the specific date of an event is not known, the event has been assigned to the last day of the appropriate month by default. The first line of each entry specifies what date information is available.;xNLx;;xNLx;Note on links: If a link becomes outdated, copy the old link into the [Wayback Machine](http://archive.org/web/) to access an archived copy. Motu can supply a copy of most documents cited upon request.
From December 6-17 2004, the tenth Conference of Parties was held in Buenos Aires, Argentina.
The European Union Emissions Trading System (EU ETS) launched Phase 1, a pilot phase lasting from 2005 through 2007. The pilot phase focused on power generators and energy-intensive industrial sectors.
On 16 February 2005, the Kyoto Protocol (adopted in 1997) entered into force.
On 20 April 2005, the government announced measures to streamline the development of Negotiated Greenhouse Agreements (NGAs).
In April 2005, the Japanese government launched the Japanese Voluntary Emissions Trading System (JVETS).
From 4 May to 8 July 2005, the government consulted on the design for a carbon tax (first announced in 2002), intended to take effect from 1 April 2007.
On 16 June 2005, the government released a net position report projecting a deficit of 36.2 Mt CO2eq for the first Kyoto commitment period (2008-2012).
In June 2005, Cabinet commissioned a review by officials of the climate change policy package agreed in 2002.
On 17 September 2005, a general election was held. Labour formed a government in coalition with the Progressive Party and with confidence-and-supply agreements with New Zealand First and United Future.
On 2 November 2005, officials completed the report "Review of Climate Change Policies." It was publicly released on 21 December 2005, when the government announced it would not proceed with the carbon tax.
From 28 November to 9 December 2005, Montreal hosted the Eleventh Conference of the Parties to the UNFCCC (COP) and the First Conference of the Parties serving as the Meeting of the Parties (CMP) to the Kyoto Protocol.
On 19 December 2005, the Cabinet Business Committee (with authority to act) decided not to proceed with the carbon tax as first proposed and requested officials to assess alternative policies. The public announcement was made on 21 December 2005.
On 20 December 2005, seven Northeastern US states announced their agreement to implement the Regional Greenhouse Gas Initiative (RGGI), a regional emissions trading scheme for the power sector with a first compliance period starting in January 2009.
On 31 March 2006, the Ministry for the Environment released New Zealand's "Fourth National Communication under the UNFCCC" updating New Zealand’s progress toward its commitments under the UNFCCC and toward implementation of the Kyoto Protocol.
On 23 May 2006, Cabinet considered a new series of whole-of-government climate change work programmes.
On 4 July 2006, the government announced the implementation of the new series of climate change work programmes, together with updates on the preparation of the "New Zealand Energy Strategy" and "New Zealand Energy Efficiency and Conservation Strategy".
On 18 July 2006, the government released a net position report projecting a deficit of 41.2 Mt CO2eq over the first Kyoto commitment period (2008-2012).
In August 2006, Australia's National Emissions Trading Taskforce convened by the State and Territory Governments released its report "Possible Design for a National Greenhouse Gas Emissions Trading Scheme."
On 27 September 2006, the Global Warming Solutions Act of 2006, or Assembly Bill (AB) 32, entered into law in California.
On 6 October 2006, Victoria University of Wellington hosted a symposium entitled "Climate Change: The Policy Challenge." In a keynote address, Hon David Parker, Minister for Climate Change Issues, described current initiatives and identified strategic principles to guide future climate policy development.
On 30 October 2006, the report "The Stern Review: The Economics of Climate Change" was released in the United Kingdom and grabbed global headlines.
From 6-17 November 2006, Nairobi hosted the Twelfth Conference of the Parties to the UNFCCC (COP) and the Second Conference of the Parties serving as the Meeting of the Parties (CMP) to the Kyoto Protocol.
On 9 November 2006, Parliament passed the Climate Change Response Amendment Act 2006.
From 27 November 2006 to 30 March 2007, the government consulted on a series of climate change policy discussion papers.
On 2 February 2007, IPCC Working Group I released the summary of its report on "The Physical Science Basis" as part of the IPCC Fourth Assessment Report. The full report was published in March.
On 13 February 2007, Prime Minister Helen Clark announced a national aspiration to achieve carbon neutrality, and an intention for the public service to be on a pathway toward carbon neutrality by 2012, with the first six departments carbon neutral (including through offsetting) by 2012.
On 26 February 2007, the government released the report "2006 Deforestation Intentions Survey." This projected accelerated deforestation under current policy settings.
In April 2007, the government established an Emissions Trading Group to design a New Zealand emissions trading system.
On 31 May 2007, the Australian Prime Ministerial Task Group on Emissions Trading (established in December 2006) released its final report recommending that Australia adopt an emissions constraint ahead of a global agreement and implement an emissions trading scheme.
In June 2007, the governments of New Zealand and Australia launched a Joint Officials Group on Emissions Trading Design (JOG) to assess options for harmonisation and linking. It suspended work in August 2008.
On 7 August 2007, in a speech at a seminar at Buddle Findlay, Hon David Parker, Minister for Climate Change Issues, outlined the process for designing an NZ ETS.
On 21 August 2007, the Cabinet Policy Committee (POL) agreed in principle (subject to stakeholder and Māori engagement and final Cabinet agreement) that New Zealand would implement an economy-wide cap-and-trade ETS on the basis of specified objectives and key design features.
In August 2007, the government's summary of submissions on post-2012 measures showed considerable support for proceeding with emissions trading post-2012.
On 1 September 2007, the government released the "Sustainable Land Management and Climate Change Plan of Action."
On 12 September 2007, IPCC Working Group III released its full report on "Mitigation of Climate Change" as part of its Fourth Assessment Report.
On 18 September 2007, IPCC Working Group II released its full report on "Impacts, Adaptation and Vulnerability" as part of its Fourth Assessment Report.
On 20 September 2007, the government released its engagement documents "The Framework for a New Zealand Emissions Trading Scheme" and "Forestry in a New Zealand Emissions Trading Scheme". The IRD also released a separate engagement document on "Emissions Trading Tax Issues". Consultation continued during the month of October.
On 20 September 2007, Hon Parekura Horomia, Minister of Māori Affairs, announced that "the government would conduct a study of the impacts of an ETS on Māori, and establish a Māori Reference Group to provide policy advice."
In September 2007, the government released a net position report projecting a deficit of 45.5 Mt CO2eq for the first Kyoto commitment period (2008-2012).
In September 2007, the IPCC published the Synthesis Report, combining individual reports from three working groups for the AR4 cycle.
In September 2007, the Climate Change Leadership Forum was established to facilitate communication between the government and thought leaders in the broader community during development of the NZ ETS.
On 7 October 2007, economic consultancy Infometrics released a report entitled "General Equilibrium Analysis of Options for Meeting New Zealand’s International Emissions Obligations".
On 9 October 2007, the government announced the establishment of the New Zealand Climate Change Centre through collaboration between all nine Crown Research Institutes and Canterbury and Victoria Universities.
On 11 October 2007, the government released a New Zealand Energy Strategy to 2050 and an updated New Zealand Energy Efficiency and Conservation Strategy.
On 24 October 2007, the International Energy Agency (IEA) reported back on its external review of the government's proposed framework for an ETS. In a letter to the Ministry of Business, Innovation and Employment, the IEA encouraged the scheme's implementation.
On 29 October 2007, the International Carbon Action Partnership (ICAP) was launched to "create an international forum of governments and public authorities that are engaged in the process of designing or implementing carbon markets". New Zealand was a founding member.
In October 2007, Point Carbon prepared two reports for the Emissions Trading Group on "Functionality in the International Carbon Reduction Project Market" and "Issues in the International Carbon Market, 2008-2012 and Beyond".
On 15 November 2007, the IPCC released its "Synthesis Report" as part of the Fourth Assessment Report.
On 19 November 2007, Forests (Permanent Forest Sink) Regulations 2007 (SR 2007/354) were made by Order in Council.
From 3 to 14 December 2007, Bali hosted the Thirteenth Conference of the Parties to the UNFCCC (COP) and the Third Conference of the Parties serving as the Meeting of the Parties (CMP) to the Kyoto Protocol.
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