Emis­sions trad­ing full of pit­falls


Matamata Chronicle - - Rural Delivery - By STEW WADEY

We’re told the Emis­sions Trad­ing Scheme is an es­sen­tial part of ‘‘brand New Zealand’’ but it’s not.

Otago Univer­sity’s As­so­ciate Mar­ket­ing Pro­fes­sor John Knight sur­veyed 515 first-time ar­rivals at Auck­land Air­port, find­ing only three who would be put off com­ing here if we had ge­netic mod­i­fi­ca­tion. I doubt our scheme even reg­is­ters on the con­sumer’s radar. Yet ev­ery­one is pay­ing more to en­rich largely for­eign-owned car­bon foresters.

Un­der cur­rent leg­is­la­tion, farm­ers in a few years will be pay- ing even more, mean­ing less will be spent in town.

The Agri­cul­ture and Forestry Min­istry has spent $55 mil­lion over the last two years on Emis­sions Trad­ing Scheme pol­icy ad­vice. While the process for forests of less than 100 hectares is sim­ple, it in­volves pa­per­work. The process for reg­is­ter­ing a post1989 for­est of more than 100ha is more in­volved and costly.

Fed­er­ated Farm­ers’ ad­vice to landown­ers is to take in­de­pen­dent fi­nan­cial ad­vice be­fore reg­is­ter­ing a for­est. You need to go into this with your eyes wide open.

Not ev­ery planted area qual­i­fies as a Ky­oto for­est. Pre­vi­ously forested pre-1990 land is com­pul­so­rily en­rolled into the scheme whereas, for post-1989 forests, it re­mains vol­un­tary. Ap­ply­ing for the pre-1990 al­lo­ca­tion means sur­ren­der­ing any abil­ity to seek ex­emp­tions for de­for­esta­tion of less than 50ha and that in­cludes tree weeds. With post-1989 forests, ev­ery unit claimed at­taches a con­tin­gent li­a­bil­ity to land ti­tle for the same num­ber of units, so here is a cau­tion. If there is a pos­si­bil­ity the land could be used for some­thing else in the fu­ture farm­ers need to think twice for, once reg­is­tered, it will carry an en­dur­ing fi­nan­cial li­a­bil­ity for the units claimed.

If you want to use that land in the fu­ture you will have to re­im­burse the Gov­ern­ment for the units re­ceived.

A for­est fire or a land­slide will see a landowner re­im­burs­ing Gov­ern­ment for all the emis­sions units earned.

The sting is that the cur­rent price of emis­sions units will ap­ply rather than the orig­i­nal price. Even with per­ma­nent forests, this de­mands as­tute risk man­age­ment and ap­pro­pri­ate in­surance cover. It also has to be re­mem­bered that post-1989 forests won’t de­liver an end­less sup­ply of emis­sions units ei­ther. They will run out over time. Con­fused? It’s no won­der. Get a range of ad­vice and crunch the num­bers for your­self.

Stew Wadey.

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