Government commended for ETS stand

01-06-2010 | Not Specified

For more than two years forest owners have been bound by the emissions trading scheme. Although this has caused difficulties for many of them, they say unwinding the scheme now would be hugely complex and costly. It would also undoubtedly reduce interest in new forest planting.

"We commend the Government for its resolve. The ETS charges that will apply to fossil fuels from July 1 are a necessary first step in the long journey New Zealand has to make to become a low-carbon economy," Forest Owners president Peter Berg says.

"Unwinding the ETS now would send powerful messages to affluent overseas consumers and potential tourists about New Zealand's real commitment to its 100% Pure brand. Trade protectionist lobbies would not hesitate to use it to undermine our access to their markets."

He says it now appears that the majority of Kyoto forest owners are registering their forests with MAF so they can be part of the ETS.

"MAF estimates that more than $1 billion worth of credits will be paid out to them in the next 12 months - much of which will be used to fund the planting of new Kyoto forests. It also places an obligation on forest owners to replant following harvest."

The ETS is intended to encourage consumers and businesses to reduce their carbon emissions and become more energy-efficient. Emitters can also offset their emissions by buying carbon credits from owners of Kyoto forests and, because it is an intensity-based scheme, reduce their exposure by becoming more energy efficient.

"Quite apart from the need for New Zealand to reduce carbon emissions and meet its Kyoto obligations, these behaviour changes are strategically important for New Zealand," Berg says. "We need to reduce our dependence on imported oil and we need to encourage the planting of forests on erosion-prone farmland which is often uneconomic for production forestry."

He says the quite small ETS charges that will apply to fuel and energy add up to significant sums when calculated across the whole economy, but they need to be seen in the context of recent market price movements.

"While no one wants to pay more for anything, the ETS charges are modest and will doubtless encourage changes for the better. Further charges are scheduled for 2013 and 2015, but the Government says their implementation will depend on what other countries are doing - which seems eminently sensible."

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