Wellington Emissions Trading Workshop
Stream A: Forestry and Agriculture
2 October 2007
Key Themes
Introduction: These key themes are a record of points raised by participants at the workshop – they are not the consensus of the participants.
Agriculture in the ETS:
• Interest in timing of entry for sub-sectors of agriculture.
• Price impacts:
• Concern about change through time as free allocation is phased out and the sector is buying units on the open market.
• On-farm tree planting:
• Concern about ETS risk factors complicating offset planting.
• Ensure use of planting on farms is available as an offset under ETS.
• Comments about value/cost of agriculture not taking liabilities until 2013.
• Opportunities for NZ agriculture which is carbon efficient.
• Importance of highest and best use of land.
• Big issues to be worked on include:
• Intra-allocation of units/credits.
• Point of obligation – keen to negotiate with Govt.
• Is modelling/measurement of emissions on-farm possible and practical?
• Cost impacts:
• Living on credit card – sector will have to pay for emissions.
• Look scary.
• Need practical methods for mitigating emissions.
• Desire for reductions of emissions to be captured by the ETS.
Forestry in the ETS:
• Overall fairness:
• Government created deforestation liability, forestry industry required to pay disproportionate share.
• Concern about effects on land values of the different treatment of pre 1990 and post 1989 forests.
• Adequacy of free allocation of units (compensation) for pre 1990:
• Relative to impact on land value.
• Relative to size of future liabilities.
• Relative to being ‘locked in’ to forestry on that land.
• Questions about timing of allocation.
• Need for certainty over land classification/ definition of forest:
• Scrubland which is still grazed and occasionally cut.
• Land which was planted post 1989, but under scrub at 1990.
• Interest in the treatment of indigenous forests and Crown Forest Licence forests in the ETS.
• Liquidity of NZU market:
• Impact of price fluctuations on incentives to join the scheme.
• Proposed approach to international linking.
• Fast forest fix:
• Costs / risks to Crown.
• Other
• Does sector carry the most risk of rules changing post-Kyoto?
• Creation of two forest industries - pre 1990 and post 1989.
ETS:
• General support for ETS (not unanimous).
• Effects on price and supply of NZUs from:
• Linkages with emissions trading internationally.
• ‘Hot air units’ potentially flooding the market.
• 10% international trade cap (Commitment Period Reserve).
• Concern about supply of post 1989 units.
• Tax treatment of NZUs
• Need clarity at start of scheme.
• Need fairness for pre 1990 and post 1989 forests.
• Need to consider Treaty of Waitangi, and implications for the quantum of settlements (concluded, under negotiation, and future).
• Concerns about the timing of entry of sectors.
• Concern about overall long-term costs of administering the scheme.
• Interest in carbon in soil, tussock grasslands and the marine reservoir.
General:
• Important to protect biodiversity and water in climate change policy. Concern about risks to biodiversity from incentives to plant.
Contact for Enquiries
Sustainable Land Management and Climate Change
MAF
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: 0800 CLIMATE (254 628)
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