New Zealand will use an emissions trading scheme as its core price-based measure for reducing greenhouse gas emissions and enhancing forest carbon sinks. The New Zealand Emissions Trading Scheme (NZ ETS) will operate alongside other policies and measures to reduce domestic emissions and achieve New Zealand’s broader sustainability objectives.
Forestry plays a critical role in managing New Zealand’s carbon footprint and helping the country adapt to climate change by reducing erosion and flooding. Deforestation is also a major source of greenhouse gas emissions globally and in New Zealand.
The emissions trading scheme has been designed to encourage new planting and better management of our forest estate. Forest owners entering the emissions trading scheme will receive New Zealand units (NZUs) which they will be able to sell through the emissions trading scheme trading arrangements. Under the government’s new partnership programme with the agriculture and forestry sectors (called the Sustainable Land Management and Climate Change Plan of Action) there will also be the option of cash grants to encourage new planting by land owners. Other initiatives under the Plan of Action will complement the emissions trading scheme, and include more research, technology transfer, encouraging more use of wood products, and bioenergy.
The emissions trading scheme will have different rules, depending on when a forest was first established. This reflects the rules for determining the government’s credits and liabilities under the Kyoto Protocol. Under the Kyoto Protocol, ‘Kyoto forests’ (post-1989 forests):

  • are those established by direct human activity on land that was not forest land as at 31 December 1989;
  • generate forest sink credits for growth from 1 January 2008; and
  • create liabilities when carbon stocks decrease, such as at harvest or if the forest was to burn down.

Under the Kyoto Protocol, ‘Non-Kyoto forests’ (pre-1990 forests):

  • are areas that were forested as at 31 December 1989;
  • do not generate forest sink credits for New Zealand;
  • do not generate any liabilities if the forest is harvested and re-established; and
  • generate liabilities if the land is ‘deforested’ – where the trees are removed and a new land use is introduced.

For more information on forestry in a New Zealand emissions trading scheme http://www.maf.govt.nz/climatechange/background-reports-and-analysis/forestry-in-nz-emissions-trading-scheme/forestry-in-NZ-emissions-trading-scheme.pdf For more information on New Zealands climate change solutions http://www.climatechange.govt.nz/index.shtml