Adrift: What future does the ETS have? [NZ]Friday 28 Aug 2026
Adrift: What future does the Emissions Trading Scheme have? finds that the NZ ETS will not achieve our climate goals, nor will it yield carbon prices high enough to significantly reduce emissions. Instead, it will continue to drive new forest planting to offset New Zealand’s emissions – leading to a significantly larger forestry estate over time. That forestry estate will need to be maintained by future generations in the face of increasing risks from fire, disease and extreme weather. The NZ ETS has reached a critical turning point, and major reform is needed. “It is a question of ‘when’, not ‘if’ reform happens. The role of forestry in particular needs a fundamental rethink if New Zealand is to have any hope of achieving its climate commitments and reducing the risks that the inclusion of forestry in the NZ ETS has created,” the Commissioner said. The question is not whether forestry has a role to play in New Zealand’s climate policy – it is whether that role should continue to be delivered through the NZ ETS. Adrift: What future does the Emissions Trading Scheme have? calls for a broad discussion about what the scheme is intended to achieve and what design changes are needed to ensure it is fit for purpose. The Commissioner recommends that the Government initiate a comprehensive review of the NZ ETS to address fundamental questions about the scheme's long-term purpose and design. He recommends:
He warns that time is not on our side. “Waiting longer to address the issues, especially around forestry, will only make them harder and more expensive to solve. Reform is, in my view, inevitable. We cannot let the problem get worse in the meantime.” More >> Source & image credit: NZ Government --- Read More: New Zealand Institute of Forestry rejects blanket forestry moratorium (NZIF) The New Zealand Institute of Forestry (NZIF) says that proposals to halt new forestry registrations or progressively remove forestry from the scheme are premature and risk further undermining investor confidence. NZIF President Adrian Loo says that the “Adrift: What future does the Emissions Trading Scheme have?” report released by the Parliamentary Commissioner for the Environment raises legitimate questions about the balance between reducing gross emissions and removing carbon through forests. “New Zealand needs faster reductions in gross emissions, but this does not diminish the importance of carbon removals. We need both. The challenge is to design a system which recognises their different roles and provides credible incentives for each.” NZIF is concerned the report’s media release presents modelled scenarios as settled outcomes. The report itself acknowledges its results are projections rather than predictions and depend heavily on assumptions about future carbon prices, planting rates and forest owner behaviour. “A model looking ahead to 2075 can help us understand possible risks, but it cannot tell us with certainty how markets, technology, landowners or governments will behave over the next 50 years. Major policy decisions should not be based on one set of modelled scenarios,” NZIF also says an important distinction is being overlooked between Government auction units and forestry units. “Government auction units are permissions to emit. Forestry units recognise carbon which forests have actually removed from the atmosphere. Treating both forms of supply as though they have the same climate effect overlooks a fundamental difference.” NZIF agrees biological carbon storage carries risks from fire, pests, disease and extreme weather. However, it says these risks should be addressed through professional forest management, monitoring, enforceable standards and appropriate financial provision. Descriptions of “vast new plantations of highly flammable, storm prone pine” are unhelpfully emotive and do not reflect the diversity or reality of modern forestry. “Forestry is not a single land use. A managed production forest, a permanent exotic carbon forest, an indigenous forest and a planned transition forest have different purposes, benefits and risks. Sound policy must distinguish between them.” “Broad descriptions of pine forests as inherently dangerous show insufficient recognition of forest management, fire planning, engineering, harvesting controls and the regulatory improvements made across the sector. NZIF says a blanket moratorium on new forestry registrations would not simply pause the present system. It would be a significant policy intervention which could affect production forestry, farm forestry, indigenous regeneration and transition projects. It could also strand investments made in good faith under rules established by successive governments. “Foresters did not design the ETS. Landowners and investors have responded to the incentives created by government policy. They should not be blamed or retrospectively penalised for following those rules.” Forestry is a long term investment and unnecessary changes to ETS settings will seriously erode investor confidence and will result in significant reductions in planting rates across all forest types. New Zealand does not need to face a choice between reducing emissions and growing forests. We need faster reductions at source alongside the right trees, in the right places, managed for the right purposes. “Foresters must be part of the discussion and forestry part of the solution.” Source & image credit: NZ Government (NZIF) --(2022)2.jpg) | ||
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