EDS & Partners Urge Government To Accelerate Gross Emissions Reductions And Strengthen Incentives For Indigenous Forests

Tuesday, 15 August 2023, 12:37 pm
Press Release: Environmental Defence Society

Government consultations on two key Emissions Trading Scheme (ETS) reform opportunities closed on Friday. One considered whether (and if so, how) the ETS should prioritise gross emissions reductions whilst maintaining support for forestry removals. The other considered what type of forests should be allowed to register in the ETS’s permanent forest category.

Together, the consultations present a crucial opportunity to accelerate gross emissions reductions and strengthen the incentives for indigenous forests. The Environmental Defence Society (EDS), Pure Advantage and WWF-NZ lodged joint submissions on both.

Review of the NZ ETS

“Aotearoa New Zealand has committed to a 2050 net-zero emissions target and the ETS is a key tool for achieving this. But unlike other countries, the NZ ETS allows emitters unlimited access to forestry removals to offset their greenhouse gas emissions. Technically then, we could meet our “net zero” 2050 target entirely through forestry offsets, with no gross emissions reductions,” said Gary Taylor, CEO of EDS.

“Given that it is currently cheaper to offset emissions through exotic monocultural plantations and ‘carbon’ forestry, it is unsurprising that without radical change, the ETS will not drive the urgent and deep gross emissions reductions needed to help limit global warning to within a 1.5°C increase.

“Continuing as we are could lock in unsustainable levels of exotic afforestation that will not provide a long-term, climate-resilient, biodiverse and regenerative carbon sink necessary to meet our climate obligations and biodiversity targets. This is inconsistent with tackling the interrelated climate and biodiversity crises simultaneously and synergistically as the Government has undertaken to do pursuant to Te Mana o te Taiao, the first Emissions Reduction Plan, the National Adaptation Plan, and the Kunming-Montreal Global Biodiversity Framework.

“The outcomes the NZ ETS is currently driving put us entirely out of step with - and behind - comparable jurisdictions, which are committing to rapid decarbonisation. The risk of reputational and trade-related repercussions should not be underestimated.

“Ultimately though, the repercussions will be existential. We are in a climate emergency - the evidence of it is everywhere and getting worse - we simply don’t have time to delay or displace genuine action.

“That is not to say we will not need forestry removals. We absolutely will, provided they are going to be capable of sequestering and storing emissions in perpetuity, at the same time as reversing biodiversity loss and securing other co-benefits. But the incentives for these removals need to be independent of those for gross emissions reductions.

“We encourage officials to carefully consider how to qualitatively differentiate the incentives for forestry removals so that removals generated by long-lived, self-sustaining, climate-resilient and biodiverse forests attract a premium. A more nuanced approach to forestry incentives will better enable the establishment and restoration of indigenous forests, which will be critical natural infrastructure for future generations.

“Our joint submission proposes a way forward, which includes:

• Setting a specific level of gross emissions reductions and indicative levels of forestry removals
• Separating incentives for gross emissions reductions and forestry removals in the NZ ETS
• Developing “durable” incentives for removals to and beyond 2050
• Strengthening the legislative purpose of the Climate Change Response Act (CCRA), and the 2050 targets, to ensure these mandate an emissions reduction pathway genuinely consistent with a 1.5°C future
• Adopting temporal horizons that:
  • Prioritise deep and rapid gross emissions reductions by 2030
  • Incentivise urgent indigenous reforestation (and restoration) now with a view to realising a net-negative emissions and nature-positive future from 2050 and beyond and ensuring that our international obligations are realised onshore to the extent possible
  • Require strategic consideration and optimisation of the types, roles, location, scale and co-benefits of long-lived greenhouse gas removals, particularly forests, across multiple generations.

The joint submission therefore supports accelerating the development of a carbon removals strategy that:

• Will deliver high quality, risk-adjusted sequestration through stable and credible financial support for establishment (and restoration) and ongoing maintenance
• Is designed (and implemented urgently) to secure sustained carbon storage in perpetuity (i.e. for permanence)
• Aligns with robust environmental integrity standards consistent with the best available science and international best practice
• Delivers and optimises biodiversity and other co-benefits and establishes an intergenerational natural infrastructure asset in the public interest
• Minimises land-use flexibility by supporting a mosaic land-use approach.

“This is a fundamental opportunity not only to urgently recalibrate the ETS’s net/gross settings, but to optimise its removals settings. The latter is of key relevance to the redesign of the permanent forest category,” said Gary Taylor.

Redesign of the permanent forest category

The permanent forest category of the NZ ETS opened on 1 January 2023. The Government originally intended to restrict registrations to indigenous forests, but later announced that both indigenous and exotic forests could register in the category, subject to further work on how the category should be designed.

“The nature of the Government’s abrupt reversal of its original proposal to exclude exotics from the permanent forest category, and the unsatisfactory process it has followed since, is highly suggestive of undue influence by vested and vocal sector interests, and may have been unlawful,” says Gary Taylor.

“Appeasing those vested interests can be the only justification for the proposed inclusion of large-scale ‘transition’ forests in the category given that the evidence base for their ecological viability and commercial feasibility over time is significantly limited - and acknowledged by officials to be so. Pre-empting the effective regulatory design of a forest model that presents unacceptably high intergenerational risks and uncertainty is extremely concerning.

“We do not support the inclusion of exotic, including ‘transition’, forests in the ETS permanent forest category and want them removed. The permanent forest category - as its name implies - should be restricted to forests known to be able to optimise and sustain sequestration and storage of carbon in perpetuity. It should therefore be restricted to biodiverse indigenous forests for the reasons set out in our joint submission.

“A moratorium on any further registration of exotic forests in the permanent forest category should be implemented urgently.

“This approach best aligns with:

• Upholding the precautionary principle and intergenerational equity because of the extent of uncertainties and risks associated with permanent exotic and transition forests
• The commitment to take an integrated approach to addressing climate change and biodiversity loss together
• Minimising administrative and operational complexity.

“If there are legitimate Treaty-based concerns raised by some Māori entities regarding the redesign of the permanent forest category, we consider these can be addressed sepatately. Those concerns should not lead to a continuation of compromised and ineffectual policy settings aimed at meeting our climate change targets,” Mr Taylor concluded.

Both submissions are available here.

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