1 September 2012
Foresters feel the watering down of the Emissions Trading Scheme has reached "overkill" level and will result in the partial deforestation of the country. In the cabinet papers released this week on the amendments to the scheme, the Government makes no bones about the economic growth motive behind extending the light impact of the scheme on businesses emitting carbon.The scheme was set up under the last Labour government in 2008 with the stated intention of putting a price on emissions to encourage the economy to restructure towards a lower carbon future. But the scheme, which critics say has made no discernible difference to the country's emissions patterns, is now to be watered down in a very short timeframe.
In the released papers, the government justifies the move by saying that New Zealand will meet its Kyoto agreement targets and that it is important that the country only does its “fair share” of emissions reductions.
David Rhodes, president of the Forest Owners Association, says the proposed changes have caused dismay among foresters.
“From our perspective the disappointment continues. In particular I would summarise the position of the government as being overkill in terms of protecting the emitters.
“All I can see is unconstrained emissions and constrained forestry.”
Nigel Brunel of carbon trader OMF Financial says the biggest emissions trading scheme is the European one, but it restricts certain types of carbon credits because of their dubious natures. That makes those dubious credits very cheap, and New Zealand is not going to restrict them.
Brunel said that meant the price faced by Kiwi emitters is really lower than a fair definition of the international price.
“Why don't they just come out and say that the world is going to hell in a handbasket and we think it is better to have the lowest carbon price possible rather than saying something that is factually wrong?" he said.
The prices that the new-look ETS are likely to generate for the foreseeable future are not going to encourage anybody to plant trees, Brunel believes, or for foresters with credits to be tempted to sell them.
Carbon market expert Lizzie Chambers, of Carbon Match, said the building of a carbon infrastructure and bureaucracy in New Zealand now seems to have been a bit of a waste of money, and that New Zealand will become an even bigger buyer of foreign credits unwanted in Europe.
Recent information released showed more than 70 per cent of credits surrendered by emitters last year were imported.
At the same time, it appears that the scheme could well prevent foresters from exporting their credits thanks to the removal of a "backing" requirement. The Government acknowledged that allowing exports could require it to buy-in matching credits from overseas, something it is unlikely to want to spend tax dollars on.
Story by Rob Stock, Sunday Star Times, © Fairfax NZ News. To read the full story, click here.