Climate change and sustainable land management

At the end of 2006 the Government released a series of related discussion documents on the energy sector and climate change. These include a paper on the Government's proposed plan of action for the forestry and agricultural sectors with particular emphasis on the way forward for a carbon neutral economy and way of life.

The latest conclusions reached by the Intergovernmental Panel on Climate Change presented in Paris earlier this month have been seen as marking the day on which global thinking on climate change moved from debate to action. New science has allowed scientists making up the Panel to conclude that global warming was "unequivocal" and that human activity was "very likely" to blame.

In New Zealand the programme for action has already been put in place and, as indicated by the Prime Minister's 2007 Statement to Parliament, sustainability and climate change will continue to be a major focus over the coming years.

One of the most recent Government initiatives on climate change was the passage of the Climate Change Response Amendment Act in November last year. This legislation:

• made changes to the New Zealand Emission Unit Register to allow private New Zealand individuals and businesses to hold accounts with the Register and to trade in emission units (or, as they are more commonly known, "carbon credits"); and
  
  
• introduced the Permanent Forest Sinks Initiative which creates an opportunity for "Kyoto-compliant" landowners to gain financially through newly established permanent forest sinks. Landowners meeting the requirements of the initiative will be able to obtain tradable Kyoto Protocol compliant emission units in proportion to the carbon sequestered in their forests.

Following on from this legislation, in December 2006 the Government released a series of related discussion documents including:

• the Draft Energy Strategy (also discussed in this issue of Commercial Quarterly) along with two discussion papers,
  
  
• Transitional Measures: Options to move towards low emission electricity and stationary energy supply and to facilitate a transition to greenhouse gas pricing in the future; and
  
  
• Discussion paper on measures to Reduce Greenhouse Gas Emissions in New Zealand post-2012;
  
  
• the Draft New Zealand Energy Efficiency and Conservation Strategy; and the
  
  
• the Sustainable Land Management and Climate Change discussion document.

Submissions on these documents are due by 30 March 2007.

Sustainable land management and climate change

The Sustainable Land Management and Climate Change discussion document proposes policies for the agriculture and forestry sectors to be developed and implemented through a single, collaborative "Plan of Action". The Plan of Action is based on four pillars:

• adapting to climate change;
  
  
• reducing greenhouse emissions from land-based activities and creating carbon sinks;
  
  
• capitalising on business opportunities arising from climate change; and
  
  
• working together by creating linkages between the Plan of Action and other Government and industry led initiatives.

There are 16 possible options listed in Pillar Two, 10 in agriculture and six in forestry.  The Government is looking for guidance on which to choose before deciding on a preferred policy package.

One of the more controversial proposals outlined in the paper is the Government's proposal to impose a flat deforestation charge on land use change from forestry to another use. The alternative option being proposed is to implement a tradable permit regime under which owners of forests would be required to hold a specified level of permits before they could switch to a different land use.

The discussion document also outlines measures to encourage afforestation through the provision of an "afforestation grant scheme"(AGS) or the choice between AGS and devolved Kyoto credits with associated liabilities.

The options put forward to address agricultural emissions include a tradable permits regime and offset schemes which would allow farmers to meet their agricultural emission liabilities by, for example, planting trees and producing biofuels.

Enquiries and information

For more information on any of the cases, articles and features in Commercial Quarterly, please email Diane Graham or call her on 64 9 916 8849.