The implementation of the Emissions Trading Scheme has been successful, Climate Change Minister Nick Smith says.
The first report on the ETS was released today and shows an increase in the net forest areas and price incentives for renewable electricity.
Smith said 98% of emitters had met their obligations.
"It is encouraging that New Zealanders net emissions are down for two consecutive years after a 23% increase between 2000 and 2008."
Without the ETS New Zealand would be exceeding its Kyoto target by 19.5 million units and face international costs of $485m, he said.
A review of the ETS will be updated to include Australian announcements on their scheme and a report would be released next month.
Future debate is likely to focus on whether agriculture should be included and when.
It is not in the Australian scheme, nor is petrol for light road users.