Forest owners believe the just announced reform of the Emissions Trading Scheme will encourage farm foresters and hill country pastoral farmers, including sheep, beef and deer farmers, to plant more trees.
Farm Forestry Association chair, Neil Cullen, says carbon average accounting, where a forester is not penalised for harvesting so long as they replant, will encourage farmers to plant out land in forests, without a concern that this will result in a cash-flow problem for them. The reform reduces ETS compliance costs.
“This reform reflects the reality of how forest land locks up atmospheric carbon – which is after all the whole point of the ETS.”
Neil Cullen says making the system simpler to understand is also crucial.
“I know it’s a complex system, but it needs to be understood by a forester or a farmer without having to go on a course. If it’s too complicated, a landowner will do something else, or nothing. The end result is regional investment opportunities are missed and rural communities are less wealthy. ”
The Forest Owners Association says the announcement is timely and the transition path clear.
President, Peter Weir, says many investors have been seeking transparent, simpler rules for a long time.
Peter Weir says the announcement gives much needed certainty, especially in the context of the Parliamentary Commissioner for the Environment’s report yesterday and the forthcoming report back to Ministers from the Interim Climate Change Committee.
“The critical thing to make a revised ETS work is that there is political will behind it. We simply can’t have politicians shifting goal posts every three years. In the big picture New Zealand needs equity between the land-based sectors, and long-term stability. Without these factors behind it no reform of the ETS will make it work.”
ETS revamp: averaging accounting for forests
Forestry Minister Shane Jones and Climate Change Minister James Shaw announced the second set of changes to the NZ ETS as part of broader reforms to make the scheme fit-for-purpose.
“Today’s announcement includes the introduction of averaging accounting for all forests registered from January 1 2021 and the option to use the new accounting method for all forests registered in 2019 and 2020,” Shane Jones said.
“By taking a long-term view of the amount of carbon in a production forest, averaging means forest owners will be able to trade more carbon units (NZUs) at lower risk, and not have to worry about finding units to repay when they harvest.
The timing of the decision is crucial as the 2019 planting season gets underway for forest owners, they acknowledged.