The New Zealand government has announced huge reductions in emissions after their first annual report of their Emissions Trading Scheme was released. The report also showed that the scheme is also driving new investment in forestry and renewable electricity.

New Zealand’s Climate Change Minister Nick Smith said the scheme had made big, green savings: “We are on target to comfortably meet our Kyoto target with a projected 21.9 million tonne surplus. Without the ETS we would be exceeding our target by 19.5 million units and face international costs of $485 million.”

Dr Smith said that the real success was the scheme’s influencing affect on investment in new green technologies.

He said: “The price incentives of the ETS helped renewable electricity hit a 12-year high of 79% in 2010. Eleven new renewable power stations totalling 1340 MW of capacity have been consented in the past year – 59% wind, 26% geothermal, 13% hydro, 2% tidal. This is an all time high, is five times the annual average of the past decade, and contrasts with most new capacity over the last decade being fossil fuelled.

Between 2005 and 2008 New Zealand’s forests were affected by a record 40,000 hectares of deforestation. However, since the scheme has been in place, forest area grew by 4700 hectares in 2010 and is projected to increase by 5700 hectares in 2011 and 7700 hectares in 2012.