Carbon Forestry - Does the ETS Need Mates?
Wednesday 23 Jun 2021
Following their presentation at Carbon Forestry 2021 Te Uru Rākau – New Zealand Forest Service has pointed to the following website content to help aid understanding of averaging accounting:
Fact sheet: Introduction to averaging carbon accounting for forests in the Emissions Trading Scheme
Click here to access: >>
There will be further communications from Te Uru Rākau – New Zealand Forest Service once final decisions about averaging accounting, including how it applies to second and future rotation forests, have been made.
Whether relying on the emissions trading system alone will get the country to zero net emissions by 2050 is one of the key points of contention among business leaders. The flurry of statements in response to the Climate Change Commission’s final advice to the government showed business leaders will lobby most on the role of the emissions trading system (ETS) and whether other policies are needed to sit alongside it to achieve that goal is where the consensus breaks down.
There is still broad corporate consensus for the government’s goal of achieving zero net emissions by 2050. This is not a “devil in the detail” issue so much as a fundamental disagreement over the role of market forces. The commission’s view is that you need a comprehensive policy package made up of three pillars:
– Pricing to influence investments and choice.
– Action to address barriers.
– Enabling innovation and system transformation.
The commission believes that having policies alongside the ETS can put people and businesses in a better position to respond to a rising emissions price and lower their exposure and vulnerability to that price. Or to borrow from a phrase used by 1990s era finance minister Ruth Richardson speaking of the Reserve Bank governor: the ETS, like monetary policy, “needs mates”.
The commission’s report acknowledged the ETS can push economic decisions towards low-emissions alternatives but said emissions pricing plays a more limited role where decisions are made by individuals, or by small businesses or firms for whom energy and emissions are not critical to the business.
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