Beehive: ETS fixes drive action says Jones
Wednesday 7 Aug 2019A final set of changes to how forestry is treated in the NZ ETS has also been announced.
Earlier this year the Government announced averaging accounting will be an option available to forests registered from the beginning of 2019, and mandatory for forests registered from 2021 onwards.
Averaging accounting means a forest owner does not need to surrender emissions units upon harvesting. Instead they receive units as their forest grows, up to a determined average level of long term carbon storage, and they will not face any liabilities on harvest provided they replant. “Cabinet has now decided that forests registered in the ETS before 2019 will not be able to transition to averaging accounting,” Shane Jones said.
Shane Jones said there were a range of reasons for this decision, “Averaging is primarily intended to encourage new forests because they make the biggest contribution to reducing our carbon footprint.”
“It’s also about managing the volume of carbon units entering the market to maintain a stable price to drive emissions reductions. This decision will be reviewed in 2021, once we have a better understanding of how the carbon market will be affected and the resulting costs,” Shane Jones said, adding “The design details we’re announcing now add to landowners’ flexibility and help ensure the ETS is the best scheme it can be, giving prospective participants more confidence.
Forestry participants will be able to ‘relocate’ a forest under averaging accounting – perhaps to a less productive land area – without having to surrender units for the deforested area and they won’t have to pay back units in the event of natural disasters, such as a forest fire or major storm, provided they replant in four years.
“These are sensible changes, which make sure it’s easy for people to use their land how they want,” Mr Jones said.
See the full news release from New Zealand Government here.
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