Emissions Trading Scheme

The climate - it is a-changin’

"DAD! What on earth did you do to the trees?" (Farmer Freddy's youngest daughter, Pebbles - a student of environmental law - was back home after studying overseas for a couple of years.)

"Well, I've been meaning to take them out for years, and last year I finally got around to it. We've got an extra five hectares of pasture now" he replied. "What do you think?"

"I don't suppose you've heard about something called climate change, or this thing called an emissions trading scheme?" asked Pebbles (with just the slightest hint of youthful sarcasm in her voice).

"Well yes, Ms Smarty-pants, in fact I heard this morning that agriculture won't be covered by the ETS until 2015 now," replied Freddy. "And don't forget who paid for your education."

"Don't change the subject. The point is that forestry is in the ETS, now" replied Pebbles.

Pebbles explains that despite the recent review of the ETS, commissioned by the National-led Government, the forestry sector still has obligations under the scheme, applying retrospectively from 1 January 2008. And, with various exceptions like shelter belts, and pre-1990 indigenous forests, any area of forest land greater than 1 hectare may be covered by the scheme.

Pre-1990 Forest Land

One of the key issues for Freddy will be when his forest was established. Any land that was forest land on 31 December 1989, that was still forest land at the end of 2007 and that is covered predominantly with exotic species, is covered by the scheme.

"You can harvest pre-1990 forest land without incurring any liability under the scheme, provided that you replant that land in forestry," explains Pebbles.

"But if you change the land use for more than two hectares, you have to purchase emissions units (NZUs) for the amount of CO2 you have effectively emitted by chopping down the trees. Then you have to surrender them to off-set your emissions.

Post-1989 Forest Land

Pebbles goes on to explain the situation for forest land that was established after 31 December 1989.

"Because the forest was established after 1989, you can choose whether or not to become a participant in the ETS. If you had joined the scheme, you would receive one NZU for each tonne of carbon built up in those trees after 1 January 2008. But you would also have to report on your carbon stocks every five years, notify the Government of any changes in ownership or land use, and surrender emissions units if the carbon stocks in the forest reduced - if you harvested the trees for example."

"Crikey! That sounds a bit complicated. But I can choose not to join, can't I?" says Freddy.

"Yes" replies Pebbles.

"Thank goodness for that. I was getting a bit worried there. Now how about you do something nice for your old man and get me a nice, hot cup of tea?"


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