Environmental Watchdog Urges Major Overhaul of Emissions Trading Scheme for a Greener Future

Parliament’s Environment Commissioner, Simon Upton, is calling for major changes to New Zealand’s Emissions Trading Scheme (ETS). He believes that without a complete overhaul, this key climate initiative could fail within 10 to 15 years. Upton argues that the current system relies too heavily on tree planting, rather than reducing carbon emissions directly.

He suggests that carbon polluters should not be able to use tree planting as a way to meet their emission targets. Instead, the focus should shift to actual reductions in greenhouse gases. According to Upton, the existing model is merely a "tree planting scheme" that does little to address climate change. “The world needs real reductions in emissions,” he stresses, rather than just clever accounting tricks.

If changes are not made, Upton warns that the scheme may lead to an oversupply of carbon credits from forests, causing prices to plummet. A low carbon price means companies have less incentive to cut emissions or invest in clean technologies, ultimately hindering progress toward climate goals.

One report cites that without limits on forestry, hundreds of thousands of hectares may become locked in carbon forests, impacting rural communities and future generations’ land use options. Upton points out that fire, disease, and the practice of thinning trees can significantly reduce the actual carbon stored in these forests. Currently, the ETS treats trees as if they are a permanent solution for carbon storage, but this may not be the case.

Politically, making changes to the ETS could be challenging. Past attempts to modify forestry’s role faced backlash, leading to a crash in carbon prices. Upton acknowledges that any adjustments would likely be opposed, especially by Māori landowners who rely on carbon forestry.

Changing the ETS isn’t just about economics; it’s also about understanding the needs of various stakeholders. While critics from the forestry industry may argue that restrictions hurt owners, others in the scientific community support Upton’s call for reform. Nathanael Melia, a climate scientist, describes the current situation as a potential disaster akin to the 2008 financial crisis, where profit motives could overshadow real environmental benefits.

Dr. Tim Payn from Scion Institute insists that forests play a crucial role in fighting climate change but need to adapt for the future. He emphasizes the necessity of collaborative policymaking across political lines when it comes to forestry strategies.

The current economic incentives heavily favor radiata pine over native species, raising concerns about biodiversity and environmental sustainability. Upton’s recommendations to phase out the reliance on forestry could improve the ETS’s functionality while encouraging more sustainable practices.

It’s clear that reforming the ETS is complex. Balancing immediate economic needs with long-term environmental goals will be essential for New Zealand to meet its climate obligations. As Upton highlights, “At some point, the risks will become so evident that the government will need to manage them.”

For more detailed insights on climate policies and their implications, consider reviewing this report by the Ministry for the Environment.

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