Submission on NZ ETS review and permanent forestry category redesign

^{James Anderson, Flickr}

The Commissioner has prepared a submission on the Review of the New Zealand Emissions Trading Scheme consultation and the Redesign of the New Zealand Emissions Trading Scheme permanent forest category consultation. 

The submission responds to both consultations as the two are interrelated and must be considered together. The key finding is that neither document adequately identifies or quantifies the risks of using forestry in the New Zealand Emissions Trading Scheme (NZ ETS), or adequately proposes solutions to manage and mitigate them. The Commissioner recommends extensive reworking of the documents to ensure that the consultations yield meaningful results.

Greater consideration of the role of forestry within the NZ ETS scheme is long overdue. Forestry’s inclusion in the NZ ETS is causing a number of problems, including:

• difficulty in achieving gross emissions reductions
• the reshaping of rural communities due to land use change driven by carbon price-induced afforestation
• difficulties determining unit supply and demand due to constantly changing rules
• the large stockpile of privately held units causing problems in meeting our emissions targets.

Greater restrictions on forestry in the NZ ETS or managing afforestation outside the NZ ETS (with appropriate transition arrangements) should be seriously considered.

While the consultation document canvasses some issues around forestry in the NZ ETS, it lacks a clear analysis of the specific problem. Without this, respondents do not have sufficient detail to offer meaningful responses. The submission outlines potential problem definitions and identifies possible solutions.

The consultation document on the permanent forest category within the NZ ETS more clearly articulates the objective of the consultation, but it does so in an unbalanced way. It overplays the benefits of permanent forestry while underplaying the risks. Key risks to permanent forestry include fires, floods, erosion, pests, disease and general neglect of appropriate management.

To ensure these risks are adequately considered, the Commissioner recommends that consultation is framed from a risk management perspective. The design options then consulted on should address each of the risks identified with appropriately strict rules around participation in the permanent forest category of the NZ ETS.