3 Jul 2012

ETS changes broadly welcomed

6:30 am on 3 July 2012

The Government has confirmed it will continue to exclude agricultural emissions from the Emissions Trading Scheme until at least 2015.

Federated Farmers' climate change spokesperson William Rolleston says it lobbied hard on some issues the Government appears to have taken heed of and there are no surprises for farmers.

"Pushing out the introduction of agriculture to 2015 is fundamental and critical to agriculture's future prosperity."

Foresters also welcome the decision to keep compensation in place for pre-1990 forest owners who do not use the off-setting option.

But the Forest Owners Association still has reservations about other aspects of the Government's ETS plans.

They include protection measures such as keeping the 'one-for-two' obligation in place until after this year, so participants in the scheme will continue to surrender units for half the carbon they emit; and continuing the $25 fixed-price option until at least 2015, which caps the price emitters will have to pay if carbon prices begin to rise internationally.

Forest Owners' chief executive David Rhodes says the ETS changes will restore some measure of confidence to owners of existing forests but there is no clear signal to encourage new planting.

"For foresters, as potential suppliers to the market, we need to see some signals and have the same level of certainty around the downsize risks. In other words how far can the price fall? Carbon markets are artificial they need managing and we need to know how the Government's going to control supply under this market. Because that is where the new planting the country needs is going to come from."

The Green Party meanwhile says continuing to exclude agriculture from the Emissions Trading Scheme puts New Zealand's clean, green brand at risk, delays the adoption of clean technology and passes the cost of pollution on to taxpayers.