The Government’s announcement of updated settings for the Emissions Trading Scheme is a step in the right direction in restoring market and sector confidence, according to the Climate Forestry Association (CFA).

Climate Change Minister Simon Watts announced today that the Government would retain the current auction price floor, the cost containment reserve price and current reserve volumes in the ETS, while reducing the number of units available between 2025 and 2029.

Climate Forestry Association chief executive Andrew Cushen says the Government’s announcement, which was intended to restore confidence, should see the market respond positively.

“This message from the Government that it wants to retain the status quo and return credibility to the ETS will be a welcome relief for the market,” says Andrew Cushen.

“We are still seeing the lingering effects of the undermining of this market by the previous Government. The unfortunate decision to raise the possibility of a reduction in the price floor had done further damage to the sector, depressing the price of carbon and resulting in plummeting planting and investment intentions.”

“We believe today’s announcement will start returning confidence to the climate forestry sector, provided the ETS responds to the price signals, and the Government maintains its commitment to allowing the ETS to operate as it should without further inference.”

Andrew Cushen says while there is more work to be done to fully restore industry confidence, the sector looks forward to continuing to work with the Government to realise the ambitions it has laid out in the latest Emissions Reduction Plan.

“With a stable market going forward, and a growing price for carbon units in the ETS, we would hope to see greater investment in the range of actions we need to see to meet our international climate commitments.”

“As the Government’s climate strategy reflects, forestry has a key role to play in meeting our climate commitments and ambitions in a manner that is economically and ecologically sensible. Given the long-term nature of the decisions the sector needs to take to support the Government’s afforestation targets, we would hope to see that stability and confidence maintained in the future.”

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