Wednesday, September 23, 2009

Climate change: No incentive for forestry

Forestry is the key to New Zealand climate change policy. While business and farmers wail that they cannot do anything to reduce their emissions without reducing jobs (or, more importantly, their environmentally subsidised profits), forestry offers the possibility of large and deep changes in our net emissions. If planting rates rose to the levels seen in the mid-90's, we would easily meet National's utterly pathetic 2020 target, with plenty of room to spare. But in order for this to happen, we need to start planting now.

The big question in ETS design then is "will the ETS make this happen"? According to University of Canterbury School of Forestry's Professor Euan Mason, the answer seems to be "no":

Under the existing ETS, domestic demand for NZUs would likely have exceeded the maximum capacity of existing Kyoto forest (planted since 1989 on grassland) to supply credits by approximately 2013, thereby providing a powerful incentive for investing in new forest plantings.

Under the proposed ETS, domestic demand for credits would not be likely to exceed the maximum capacity of current Kyoto forest to supply NZUs until the early 2020s.

No demand means lower prices. Lower prices means less incentive. Less incentive means less planting. So, in addition to committing us to giving billions of dollars to polluters until the end of the century, National's ETS also undermines our most effective means to reduce emissions. Meanwhile, according to its Q&A on the ETS changes, National is assuming a planting rate of 50,000 hectares a year to 2020. Who does Nick Smith think will be planting these forests? Magic pixies?

This is a bad, bad policy. It sells out forest owners, it sells out the environment, and it sells out New Zealand, all for the benefit of a few, largely foreign-owned, major polluters. Which is National in a nutshell really. As with everything else they do, it is all about looting the state...