The discussions will begin again with the Government releasing its review document for comment and submissions for changes to be made to the ETS. This comes out with the backdrop of HWEN still being under discussion (apparently the lull was due to the complex responses to Cyclone Gabrielle diverting government and the re-activation has nothing to do with opposition parties rattling their cage) and so until HWEN is settled there is going to be ongoing uncertainty for farmers and land owners.
But restarting discussions is a positive step forward.
For the rural sector the role trees are ‘allowed’ to play in future planning is a key issue in how they feel agriculture is being treated. (This is further covered several paragraphs down with a separate forestry review.)
There long has been recognition that the ETS has not been working, at least not to the level that is required to incentivise behaviour to lower emissions.
Due the current ‘low’ price of carbon emitters have found it is cheaper (economic) to purchase credits off tree growers rather than to lower their emissions.
As has been noted in the past New Zealand along with Kazakhstan are the only countries allowing all emissions to be met by offsets rather than having more stringent measures utilised to lower actual emissions to meet national reduction requirements.
The latest options to be made to the ETS are aimed to move away from an ‘offset’ driven model to one that better encourages reductions in actual emissions.
The challenge is to create enough incentives to plant some forests (but in the right places and not all at once) but not drive prices so low existing forests will be felled but also having a price high enough to dissuade business and public alike from emitting. Above all certainty about the future and its trends is required.
The four options are:
Option 1 – Use existing levers to strengthen incentives for net emissions reductions e.g., reducing the number of NZUs sold through auction. Thereby creating greater demand for credits and pushing up the price of carbon. Without ‘limits’ on tree plantings it could over time result in the price coming down due to forestry ‘removals’.
Option 2 – Increase the demand for emissions units by allowing the Government and/or overseas buyers to purchase them. Similar to above but increase demand for credits rather than reducing supply.
Option 3 – Strengthen the incentives for gross emission reductions by changing the incentives for removals. This is likely to mean putting restrictions on the amount of credits able to be obtained from removals by forestry.
Option 4 – Create separate incentives for gross emission reductions and removals. That is, having two separate ‘systems’ running alongside each other.
So, there are two systems; one for reductions, the second for ‘offsets’ and these through the management of credits will likely be priced differently. It is likely the removal/offset credits would be priced at a lower level to emission reduction credits thereby allowing government to manipulate the incentives for carbon farming.
Due to the great control government would have some believe this is the preferred option of the government. The downsides are that it would involve greater bureaucratic costs and complexity. The positives are that it may allow better control of the amount of forests planted for carbon credits alone.
The issues around forestry also link in to the release of the report into redesigning the Permanent Forest Category. Whatever option the government selects it is likely the price of carbon credits are going to be influenced to get more expensive.
The review of the Permanent Forest Category (PFC) is arguably a more complex conversation than the ETS review, although once the costs of the ETS start to hit the general public that may all change.
There are three main key questions which this PFC review raises;
Q1. Which forests should be allowed into the permanent forest category?
At the moment many are sceptical, especially with exotics, in the plant and walk away model (or degrees of it). As such many of the sub-questions are around what should be allowed to fall into the “permanent forest category”. That is, is it just indigenous, or indigenous and transition (to indigenous) or should some special allowances be made for exotics under special circumstances.
Q2. How should transition forests be managed to ensure they transition and reduce the financial risks to participants?
Defining what a “transition forest” would be a good beginning but broadly it is a forest planted with the aim of transitioning from perhaps exotic to an indigenous forest at some stage. As with permanent forests (which could also transition to an indigenous forest after 60 or so years) the interim management and the decisions around what carbon uptakes are need seemingly both research and discussion. The transition exotic forest is seen as a way to reduce financial strains on those wishing to set up a permanent indigenous forest with credits available early in the process. As with all exotic forests, keeping those who own them and claim the credits ‘honest’ in managing the forest right through to transition will be key to success. As the diagram below shows there is potential for new and novel management to reach the indigenous forest stage.
Source: MPI, A redesigned NZ ETS Permanent Forest Category
While not directly covered in the review report it must have occurred to some that there is potential for some of the East Coast forests planted on the less economic sites to potentially fall into this category.
Q3. How should permanent forests be managed?
The permanent forests and how they are decided upon and being allowed to qualify for the ETS needs working through along with requirements for risks. The review says:
We consider that permanent forests must be managed to minimise future risks such as, wildfire, pests and disease and wind-related risk, to protect enduring carbon sinks. Requirements for forest management in the permanent forest category could ensure these risks are managed.
So, plenty for those interested to consider and a ‘project’ which not only may have a large influence on the country’s ETS programme but also the shape of the rural landscape and society.
Already the process has attracted criticisms from diverse quarters with the Climate Forestry Association (largely made up from forestry industry sector interests) criticising the overall ETS from inevitably pushing up costs for everyone namely consumers, which is almost a given. Meanwhile Greenpeace are saying the government’s plans are not ambitious enough and incremental proposals such as being discussed “will not really cut it”.
What looked like tacit approval came from Beef+Lamb CEO Sam McIvor who stated (On TV1 News) he was glad that the government was acknowledging that the existing model (presumably ETS and plantation forestry) was not fit for purpose.
The consultation process for feedback and ideas is open now and closes on 11th of August.
27 Comments
Why are we going anywhere near food production? This is just a political game paid for by the people least able to afford it - while James swans around in first class.
"Article 2
(b) Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production;"
https://sustainabledevelopment.un.org/frameworks/parisagreement
https://www.interest.co.nz/charts/prices/consumer-prices-index/cpi-group
The intention of this article is to protect subsistence farming, for example rice production, which also produces methane. The majority of our products are not required for subsistence, they are generally luxury items. Internationally we still need to bring down GHG emissions, and so it is expected that rice production will be prioritised for any remaining methane allocations, over ruminant agriculture.
Not quite.
In fact, no.
Producing food is critical in avoiding extinction. Producing a slight excess and storing it, provides a buffer from that threshold.
But poverty in the first-world-view sense, is the inability to acquire consumable 'stuff'. You can't eradicate that possibility if you're consuming a finite planet unsustainably - which is an exact description of modern agriculture.
Upton Sinclair territory?
Did you miss this bit - "Recognizing the fundamental priority of safeguarding food security"? James is a very naughty boy by not recognising this fundamental priority.
So you are going to eradicate poverty by shooting some cows and giving the milk market to a more expensive producer? Genius.
Providing 30% of the internationally traded dairy product market would be a fundamental of safeguarding food security. Especially given we have lowest CO2 footprint milk.
https://www.agresearch.co.nz/news/research-shows-nz-dairy-the-worlds-mo…
Hmm that presumes you (and the UN) are fine with Japan, Singapore, China, half the Middle East and any number of other massively reliant food importers scrapping over the dwindling supply of cross border trade and its consequent outcomes for poor nations looking for scraps??
Ask yourself if the whole world can adopt that strategy - and if not then it’s a dumb idea.
People tend to assume that more food is traded internationally than it actually is - which is the only reason why a tiny nation like NZ has any relevance at all. We aren’t event 2 percent of the worlds agricultural land yet we supply 30% of the internationally traded dairy products for example.
Part of the issue is we do not have a clear objective.
NZ is too small to influence global climate. Are we reducing emissions to:
• Have credibility in international negotiations
• Keep brand NZ intact
• Support technology change
• Ensure we adapt to what will in the future be more efficient models of production once technology matures.
If we want to discourage planting trees on productive farm land, then the simple solution is to reduce the credits for land we don’t want used for that purpose.
I’m not sure why we’d want to stop people buying forestry credits. It seems the argument is forestry credits make the price too cheap and there is no incentive for change. Listening on the radio the issue a person identified was that govt was dumping free credits on the market. Maybe if the govt bought the credits they give to industry on their own market this would fix the problem?
I’m fine with selling credits overseas. But we should not allow people to buy credits for our system from overseas.
"NZ is too small to influence global climate." This is a bullshit copout; our society is one of the highest polluters per capita. It is all of western society that needs to change regardless of borders. We have further to go to reach a sustainable economy than countries that are not as far industrialised.
NZ is lagging our peers in emissions reductions, if you want to protect brand NZ and our international credibility, then get onboard. We don't have time to wait for technology to evolve, a lot of which is not commercially viable.
It is a fact. China's monthly increase in CO2 is equal to our total annual production. It is bullshit to say that we are highest per capita. We are already net zero. Our annual sea shell deposition sequestration alone (43 mill t/carbon/annum EEZ) is greater than our annual CO2 emissions (and that is if you include the bullshit methane GWP100 myth).
"...expressing methane emissions as CO2 equivalent emissions using GWP100 overstates the effect of constant methane emissions on global surface temperature by a factor of 3–4"
https://clear.ucdavis.edu › IPCC-AR6-CH7-7-123
Be careful on trying to include natural sequestrations, ( which you've already had explained to you by Keith Woodford are not allowed to be counted ), how would Tonga have fared counting the Co2 and methane emissions from the recent eruption?. how would we , given our many volcanic possibilites?
The rules for everyone worldwide are clear , it must be a reduction or additional sequestration , by actions taken , to be counted.
Because some elites decided that they weren't allowed to be counted doesn't mean it doesn't exist. Just like people pretend that we didn't have a warmer climate here pre the Little Ice Age. Pretending these things don't exist demonstrates this all about very, very expensive social policy, not metrics, and highlights what a complete sham the climate change gravy train is.
43 mill t/carbon/annum EEZ. Wow! I find it a tiny bit disturbing that carbon is leaving the carbon cycle at those quantities. 160 million years ago the CO2 concentration was around 2500 ppm. Nobody really knows why, but CO2 levels declined for ~160 million years bottoming out at 180ppm about 20,000 years ago. If the concentration would have reached 150 ppm then all plant life on earth would have died! Thankfully, that disaster was avoided, and we've terraformed the earth with our CO2 emissions so that plants now grow more quickly and life is comfortable. In 1 billion years the sun will become a red giant and the oceans will boil, and earth will be dead. That is a fact. Long before that happens though I suspect that most life on earth will end because of declining CO2 concentrations. There's a real irony in all of this the CO2 hysteria.
"The history of CO 2 abundance in the atmosphere over
the last 100 Ma, during which oscillations of CO 2 levels
were imposed by orbital forcing, has been one of decline.
This decline was probably driven in large part, by the
uplift and weathering of the Himalayas which consumes
a huge amount of carbon dioxide (Raymo & Ruddiman
1992). It is likely that the Himalayan uplift, like the
proverbial straw which broke the camel's back, drove the
present Earth system into a very low-CO 2 world. It is in
this low-CO 2 world that humans evolved. A low-CO 2
world has important implications for photosynthesis
because, as also will be shown, it led to CO 2 starvation
of C 3 plants and their replacement by plants using the C 4
photosynthetic pathway which is more effcient in CO 2
starved conditions."
https://royalsocietypublishing.org/doi/10.1098/rstb.1998.0198
Easiest way to control/stop GHG production, including methane, is to up the price of fossil fuels. Agri is totally relient on FF, as is everyone else, so to cut both methane and nitros oxides you simply need to target FF. Anything else is p/@$ing in the wind.
Of course the fact this will affect the very basis of our collective lifestyle is more than 99% of the population can bare.
The facts are simple, and unassailable.
The ETS was trying to measure at the wrong end - at the exhaust pipe.
We can measure much more easily, at the front-end; at the pump.
Rationing is the go - then put the screws on; it gives more direct control to the government, makes people work out work-arounds, and gets us off fossil fuels before they get themselves off us anyway.
'The facts are simple, and unassailable.' Yeah, right. We haven't even figured out how clouds interact and you are now demanding rationing? Poor old PDK - you were much more fun when you were just a peak oil tragic.
"...When contemporary models are given information about Earth's present condition — the size, shape and topography of the continents; the composition of the atmosphere; the amount of sunlight striking the globe — they create artificial climates that mathematically resemble the real one: their temperatures and winds are accurate to within about 5%, but their clouds and rainfall are only accurate to within about 25-35%. Unfortunately, such a margin of error is much too large for making a reliable forecast about climate changes, such as the global warming will result from increasing abundances of greenhouse gases in the atmosphere.
...If a 2 percent change is that important, then a climate model to be useful must be accurate to something like 0.25%. Thus today's models must be improved by about a hundredfold in accuracy, a very challenging task. To develop a much better understanding of clouds, radiation and precipitation, as well as many other climate processes, we need much better observations."
Instead of branding anyone who doesn't bow to the PDK mantra as a "Straw Man" and continually bombarding us with your pompous, bombastic rantings, how about confining your rantings to your "think tank" group! I'm sure there are countless websites out there that would welcome you with open arms!
Try asking whether things are true, or false. Scientifically, I mean; not via religion or some such belief-set (circular endless-growth economics is one such).
Yes, to one cosseted in the first-world 'now', things are looking unsettling. But avoiding them, ain't going to address them.
Go well.
I am actually an engineer, so I think I have enough brain cells to understand your opinions! Just for the record I am not religious ( quite the opposite) believe the world needs FAIR trade, not free trade and I'm certainly not a proponent of endless growth! As I've stated in the past I actually agree with some of your opinions! However I think your delivery sucks! You have endlessly told us what you think, move on, enjoy your grandchildren!
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.