Changes to the Emissions Trading Scheme (ETS) aim to result in 89 million more trees being planted in the coming years and an extra 45 million tonnes of carbon dioxide stored in New Zealand’s forests.
Forestry Minister Shane Jones and Climate Change Minister James Shaw announced the changes to the ETS as part of broader reforms to make the scheme fit-for-purpose.
The 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, Mr 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 (NZUs) at lower risk, and not have to worry about finding units to repay when they harvest.
“It’s essential the ETS provides the right incentives for forestry over the long term so we can deliver on our One Billion Trees programme as well as our commitment to taking action on climate change and supporting the transition to a low emissions future.
“We’ve heard from the forestry sector about the need to make the ETS simpler while increasing the incentives to plant trees – simpler accounting for the carbon stored in trees will make a positive difference for anyone considering investing in forestry.”
The timing of the decision – as the 2019 planting season is about to get under way – should enable forest owners to go ahead with planting this year knowing they can choose the new system. The Ministers hope this provides the certainty they’ve been seeking as a sector.
Mr Shaw said Cabinet had also agreed to several operational changes to streamline the ETS process for forest owners.
“We will improve the emissions rulings process where applicants can get an assessment of their land prior to investment and enable the use of a mapping instrument to make applications even easier,” he said.
“These proposals work together: the improved emissions ruling process will be in place once the legislation changes, while we develop the mapping instrument over the longer term.
“These changes to the ETS are part of a number of overlapping policy levers that aim to strike the right balance between production and protection. We need clean water and reduced greenhouse gasses. We also need food and employment, including in the regions.”
Besides these important forestry changes, the Government is developing more amendments to the ETS.
Mr Shaw said these changes will improve the ETS to support New Zealand’s commitment to the Paris Agreement and our transition to a low emissions future.
The Government aims to introduce the changes to Parliament around the middle of this year.
It is also making the scheme fairer, and creating the ability for the Crown to make sure people are operating within the intended framework, Mr Shaw said.
Source: Minister of Forestry and Minister for Climate Change