The New Zealand government is to introduce a US$11/tonne tax on carbon dioxide from April 2007, fulfilling a 2002 pledge to introduce a carbon tax on fossil fuel emissions.

The government estimates the tax will increase prices by about by NZ$0.68 (US$0.50) per 20kg bag of coal; NZ$0.01 per kWh for electricity; NZ$0.04 per litre of gasoline; and NZ$0.46 per 9kg bottle of liquefied petroleum gas.

"If we are going to tackle climate change, we need to start taking environmental costs into account in the economic choices we make," said Pete Hodgson, convenor of the ministerial group on climate change, in a statement. "The carbon tax introduces a price differential between clean and polluting energy sources that reflects their environmental costs, so individuals and businesses can make informed choices," he added.