The New Zealand Government has been accused of discriminating against some forest owners with a surprise law change to the Emissions Trading Scheme. Sources: Radio New Zealand, New Zealand Forest Owners Association
The amendment pushed through with post-Budget legislation, means participants deregistering post-1989 forest land from the scheme can only surrender New Zealand emissions units.
They can’t use international units that they may have bought at about a tenth of the price, to exit the scheme.
The Government said the restriction was to protect the integrity of the ETS by stopping people from taking advantage of the price difference by registering and deregistering the same forestry land multiple times.
But Forest Owners president Paul Nicholls said it was unfair for post-1989 foresters who were planning to deregister land.
“There was no fore-warning of this and as a result, some forest owners, and we don’t know how many, will be caught with the international units that will be of no use to them and they may even have to buy New Zealand units to meet their obligations. It just seems unfair and an example of inequity,” he said.
Mr Nicholls said the Bill was designed to stop arbitraging by forest owners – a form of trading which enables participants in the ETS to profit by selling high value NZ units while meeting their obligations using cheaper international units.
“But it also captures everyday forest owners who entered the ETS in good faith and who now want to exit because it isn’t worth the candle. Small forest owners and iwi will be disproportionately affected.
“Meanwhile power companies and other emitters will be allowed to arbitrage for another year.”
FOA chief executive David Rhodes says arbitraging does not benefit New Zealand or the climate in any way.
He says there is a deep irony that the only industry that has consistently criticised the use of international units in the ETS has been singled out in this way.
David Rhodes of the Forest Owners Association said the ETS has been hugely frustrating for the forestry sector, which was meant to be part of the solution in helping New Zealand to off-set its green house gas emission levels.
“But the problem is so far that the signals that the forest sector has been getting have been reflected in the new planting levels which are close to record low levels,” he said.
“And unfortunately we are approaching a situation in the future where a lot of planting in the past will come to harvest and forestry is going to switch over, to being at least for a period of time, a source of emissions. So we will become part of the problem rather that part of the solution.”
