REFORMING INDUSTRIAL ALLOCATION in the ETS

Reforming Industrial Allocation in the New Zealand Emissions Trading Scheme.

This week a cabinet paper was released outlining a proposed new electricity allocation factor for the New Zealand Aluminium Smelter.

Unfortunately, we are in the midst of a climate crisis which has the potential to destroy economies and ecosystems alike. Given the magnitude of the situation, planting needs to increase, but focusing solely on CO2 emissions does have the potential to be dangerously singular.

Trees have been a stabilising factor on our planet for millennia, ensuring nature's balance. When Forest Leaders plant trees, our goal is to restore; restore slipping land, restore biodiversity, restore communities and provide jobs. Trees are one of the world's biggest tools in combating climate change. So, in our enthusiasm for trees, we not only look at the carbon sequestration, but we are also conscious of the other benefits of our forests such as biodiversity, recreation, land improvement, jobs and clean water.

So one of our current challenges is how can we redirect the current hype around nature's carbon sinks to focus also on nature restoration more holistically? This is no small task as the benefits of ecosystem services and our dependency on them have been well known for a long time, it's just currently we aren't held accountable for their use. This is where we can learn a lot from the evolution of the rapidly growing carbon market. As with CO2 emissions, we are going to need to first measure, then report, and finally, be held accountable for our climate impact and it is likely markets may develop, similar to carbon markets, for biodiversity, clean streams and other ecosystem services.

Carbon-centric thinking focuses on a narrow aspect of an enormous and complex problem, suggesting if we reduce carbon, the climate crisis will be solved. However the reality is we will still have other issues which must be resolved. The bottom line is planting trees should be centre-stage, but as a climate solution, not just a carbon solution.

When we focus on carbon we may not be addressing the full threat facing humidity, and we may miss opportunities to reduce multiple impacts at once. The dialogue around carbon and reforestation is of crucial importance, but the balance of understanding ecosystems and biodiversity are just as pivotal in this process to realise our climate goals. It is for this reason, Forest Leaders recommend solutions to their investors which will restore the land, our water and the climate.

NZU prices have firmed to $74 for the NZ ETS release.

Previous
Previous

NZU Q1 AUCTION