1 Sep 2009

Foresters oppose carbon credit cap

1:53 pm on 1 September 2009

The Forest Owners Association does not think there is widespread support for introducing a price cap on on carbon credits as part of the Emissions Trading Scheme.

The suggestion for a short-term cap, made by the parliamentary select committee reviewing the scheme, is aimed at helping businesses to adjust while the market for emissions units develops and matures.

But the Forest Owners Chief Executive David Rhodes, says forest owners would be unlikely to sell units while the price was low.

Kyoto Forestry Association spokesperson Roger Dickie says foresters believe a cap would mean lower prices for carbon credits earned from forests, which would discourage new plantings.

Farmers disappointed at agriculture inclusion

Federated Farmers is disappointed with the committee's recommendations that the agriculture sector should be included in the scheme.

The committee does not give any indication about when that should be, although under the current timeline the sector would not be added to the scheme until 2013.

It does say, however, that further delays for introducing agriculture would compromise the scheme's environmental purpose and its fairness.

Federated Farmers president Don Nicolson says the reviewed ETS policy is the same as the previous Government put into effect.

He says the review has failed to quantify the cost of the scheme to the productive sector. Agriculture will pay emissions charges that are applicable, he says, such as for energy and fertiliser use.

The committee's recommendations also include setting the point of obligation for agricultural greenhouse gas emissions initially with the processor. It will then be passed on to farmers.

Dairy NZ chief executive Tim Mackle says it may initially be useful to farmers to have larger companies deal with early carbon credit trading volatility, but the committee is right to suggest transferring the obligation to individual farmers at some point.

Mr Mackle says his organisation is disappointed, however, that it appears agriculture will be included in the ETS before farmers have any practical ways of reducing emissions.