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Issue 11, August 2011

Hi,

Welcome to the Carbon Farming Group newsletter.  In this issue we’ll update you on the ETS Review, share a recent email enquiry about forestry in the ETS and provide details of upcoming workshops on the Field Measurement Approach.

ETS 2011 Review Status

Below is a quick timeline of events of the ETS Review.

30th of June         

The ETS review panel provided the Minister for Climate Change Issues the Hon Nick Smith with their report. 

 

12th of July

The Minister announced that he would release the Government’s position on the review report in “a couple of weeks”.

 

1st of August             

Minister Smith announced that the report has been given back to the review panel to consider the implications of the Australian Carbon Pricing Mechanism on the New Zealand ETS.

 

Early September

An announcement from the Government on the ETS review report is expected.

 

Minister Nick Smith is pleased with how the ETS is performing
Australia vs. New Zealand

The ETS Review Panel has been asked to consider the Australian Carbon Price Mechanism (CPM). So, how does it compare with the NZ ETS? 

 

Australia CMP

NZ ETS

What is it?

A Carbon Tax

A Tax and Trade system

How does it work?

Tax on emissions, significant rebates to vulnerable sectors

All emissions accounted for, subsidies for most until 2012, only agriculture thereafter.

Where to the credits come from?

There are no credits just a tax, upto 5% offset by the carbon farming initiative

Forestry, Industry allocation, international emission reduction projects

Who sets the price?

Government, starting at $AUD 23 and rising at 2.5% per annum

Subject to international pricing up to a cap of

$NZ 25

What sectors are included?

Transport, Energy, Industrial processes (most), non legacy waste

Forestry, Transport, Energy, Industrial Processes, Waste, Agriculture.

What sectors are out?

Agriculture, commercial forestry, households, fuel for fisheries, light transport (under 4.5t), agriculture and forestry

None

  

As can be seen above, the differences between the Australian and New Zealand schemes are significant and it would be take a major revamp, and change in philosophy (ie from a trading scheme to a tax) to align the two. Therefore the review panel will probably come back to the crown suggesting that the NZ ETS should continue in its current form with any changes as per their original report.

 

For a detailed summary of the Australian CPM click here:

Forestry Scenario for Forestry in the ETS

The Carbon Farming Group recently received an email enquiry to clarify the various forestry options under the Emissions Trading Scheme. The scenario is aimed at the Lifestyle Block magazine audience but could be applied to larger forest areas.

Scenario:

Jim has a 6ha lifestyle block in Northland. There's 2ha of pine (pre 1990) that was there before he bought the property, and he has just finished planting poplars and willows through wet areas (about 1ha in total). He also has a 1ha orchard of mostly apples and plums. He is considering planting the front paddock in trees (1.5ha) because he does not have time to graze it and it is not viable to charge anyone for the use of it. Is that planting worthwhile, and if so, what kind of trees should he plant? What credits could he expect to earn from the other trees?

Response from the Carbon Farming Group.

It should be noted that the compliance costs may outweigh the benefits of participating in the NZ Emissions Trading Scheme for smaller forests. However, here’s some food for thought.

 

With the Pre-1990 forest the landowner has three options: apply for an exemption to allow for future land use flexibility - this must be done by 30 Sep 2011; or apply for a compensatory allocation of either 60 units per hectare, if the property was owned before 31 Oct 2002; or 39 units if owned after 31 Oct 2002.  The deadline for this option is 30 Nov 2011. The allocation is broken down into 2 tranches (portions) the first 38% of the total is before the end of 2012, and subject to international and domestic policy. The second tranch of 62% may or may not be allocated after 2013. The final option is to do nothing.

 

The willow would qualify as post-1989 forestry if the plantings were close to each other, had an average minimum width of 30 metres, a minimum of 1 hectare and were established on non-forest land, i.e. pasture. The willow would accumulate carbon as Exotic Hardwoods as on page 40 of the MAF Look Up Tables which can be found here. Please Note// For carbon sequestration the amount of carbon claimed is the net change between years, or the carbon accumulated for that year. For example, a hectare of pine in Auckland/Northland at age three is 8 tonnes of Carbon Dioxide or New Zealand Units (NZU’s), and at age four it is 29.  So at the end of year four you will be able to claim 21 NZU’s.

 

The orchard is not eligible to enter the NZ Emissions Trading Scheme as a post-1989 forest therefore it is unable to generate any carbon credits.

 

It is up to the landowner to decide what species they wish to plant on the last 1.5ha. It is prudent to seek independent professional forestry advice as to the viability of such a venture.  However, assuming the land is non-forest land any tree species (other than an orchard species) will be eligible as long as they reach over 5 metres in height at maturity. The amount of carbon gained will be based on the MAF Look Up Tables as above, depending on species and region.

 

For more information on the NZ Emissions Trading Scheme and climate change please visit www.carbonfarming.org.nz

 

Workshops

A number of ETS Forestry and Agriculture workshops are planned for September. The forestry workshops were announced by the NZ Institute of Forestry and are detailed below.

 

Each workshop is a separate event.  The workshops are:

Location

Date

Time

Venue

Wellington

Thursday 8 September

9:30 am to 3:30 pm

Ministry of Agriculture & Forestry

Auckland

Wednesday 14 September

9:30 am to 3:30 pm

URS (to be confirmed)

Rotorua

Monday 19 September

9:30 am to 3:30 pm

School of Forestry and Primary Production, Waiariki Institute of Technology

Christchurch

Wednesday 21 September

9:30 am to 3:30 pm

Copthorne Hotel Commodore Christchurch Airport, 449 Memorial Ave,

Christchurch

Balclutha

Tuesday 27 September

10:30 am to 4:30 pm

Telford, 498 Owaka Highway, Balclutha

Morning tea will be available from 9:00 am (10:00 am at Balclutha) and afternoon tea will be available after the end of the workshop.

Workshop costs:

 

Total (incl GST)

Non-member

$103.50

NZIF Registered Member, Graduate Member or Student Member

$57.50

Other NZIF Member

$80.50

 

Non-members can register by contacting the NZIF administration:

Jay Matthes

Phone:             (04) 974 8421

Email:   admin@nzif.org.nz

 

Feedback

If you have any questions about climate change and the rural sector, or have ideas/suggestions that you’d like to share please contact us on 0800 123 733 or info@carbonfarming.org.nz

 

Best Regards,

 

Clayton Wallwork

Trustee

Carbon Farming Group

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