9 November 2011
The National Party will introduce offsetting and explore averaging for forest owners under the ETS if it wins the General Election. Agricultural emissions will not be included in the ETS until practical emission reduction technologies are available and more progress is made on reducing greenhouse gas emissions internationally.
In a policy announcement, environment and climate change minister Nick Smith said offsetting will be introduced from 1 January 2013. This, he said, will enable pre-1990 forest owners to change land use providing they plant an equivalent area of new forest elsewhere.
However, this will still come at a cost to forest owners if National axes the second tranche of pre-1990 forest allocations. Mr Smith says this compensation will be reviewed, "taking into account the benefit that offsetting provides."
National also plans to phase in the full ETS obligations for the transport, electricity and industrial sectors in three equal steps on 1 January 2013, 1 January 2014 and 1 January 2015 as recommended by the ETS Review Panel, Dr Smith said. The scheme as it stands provides for the full obligation to kick in on 1 January 2013.
"This approach slows the cost impacts on households and businesses but continues the progress needed to drive investment in renewable energy, clean technologies and forestry. This timing also enables Transtasman linkages from 2015."
Dr Smith said National would introduce legislation in 2012 to make these amendments.
"The overall change package would be fiscally neutral. Our objective is to reduce our greenhouse gas emissions at the least cost possible and for New Zealand to do its fair share on the global issue of climate change."
National's climate change policy states that it is important to maintain land-use flexibility for pre-1990 forest land. Offsetting will therefore be introduced on 1 January 2013 regardless of the lack of international agreement.
"It makes sound scientific sense that, all else being equal, planting a tree is more important than where it is planted. [This] will allow land owners to change land use, as long as they provide an equivalent level of carbon sequestration by replanting on another site."
The allocation to pre-1990 forest land owners was made in recognition of the land value lost as a result of introducing the ETS. So the party will "review the second tranche of compensation for pre-1990 forest land owners faced with a loss of value because of restricted land use in light of the introduction of offsetting. "
The 2011 Review Panel recommended that post-1989 forest owners should be provided with the option of averaging their carbon. This concept will be examined by National as it would encourage small scale post-1989 forestry by removing the harvest liability while providing an up-front cash flow.
Sources: National Party media release and website