Fossil fuel, agriculture and forestry industries affected by new report

Fossil fuel, agriculture and forestry industries should be aware of the Parliamentary Commissioner for the Environment Simon Upton’s new report entitled Farms, forests and fossil fuels: The next great landscape transformation? 

The Report focuses on a new approach to framing New Zealand’s long-term climate change targets and policies.  It questions whether New Zealand, in setting emissions reduction targets and designing climate change mitigation policies, should continue to regard all anthropogenic sources and sinks as fully substitutable for one another.  In brief, the Report says that emitters of carbon dioxide would not be allowed access to forestry sinks, but emitters of methane and nitrous oxide would.  We expand on this below.

New Zealand’s current approach

Currently, all greenhouse gas sources and sinks are fully substitutable, one for another.  The Report states this is not a sensible basis for long-lasting climate change mitigation.

The Report identifies two main problems with New Zealand’s current approach:

  • a single target that includes all sources and sinks renders the temperature outcomes of climate policies uncertain because the fossil carbon dioxide emitted into the atmosphere has a warming effect for centuries to millennia where, by contrast, carbon stored by trees and other terrestrial ecosystems can be released quickly back into the atmosphere (through fire, pests, land use change or other disturbances); and
  • the current approach of making all land potentially available for storing carbon (as a substitute for not emitting it) will inevitably limit land use choices and options (put simply, we will run out of useable land).

The next great landscape transformation?

The Report concludes that a new approach that manages fossil emissions separately from biological sources and forest sinks would make better sense.  In practice, Upton’s proposal is:

  • two separate targets for reducing greenhouse gases from fossil emissions (carbon dioxide) and biological sources (methane and nitrous oxide); and
  • sinks would not be available for use by fossil emissions, but would be available for gases from biological sources.

The Report states that this approach would force fossil fuel industries to innovate and adapt, instead of simply relying on mitigating emissions through the use of sinks.  This approach would also result in a lower compliance costs for the agriculture industry.

Comment

The Report comes at a time when both sides of the House have been working for a significant period of time towards a Zero Carbon Bill.  The Bill continues to treat all sources of greenhouse gases as substitutable for one another, and does not follow the separated approach that Upton promotes in the Report.  Minister Shaw has already stated that Upton’s proposal will not be adopted “For the sake of providing policy stability and predictability for emitters and the forestry sector, the Government is committed to retaining the use of forestry off-sets for carbon dioxide and other greenhouse gas emissions”, although he agrees with Upton there needs to be a stronger focus on reducing real-world domestic carbon emissions, rather than relying on sinks to counteract them, nothing in the report has changed his plan to do that inside the current ETS and proposed Zero Carbon Bill.

The Report comes after there has been interest expressed in forestry investment as a method of offsetting carbon emissions. Fossil emitters will also be wary of the Report’s comments that there are a variety of other (as yet unidentified) possibilities for fossil sectors to reduce greenhouse gas emissions.

How we can help

If you would like any further information about the Report, or you have any queries arising from the Zero Carbon Bill, please contact a member of our team.

Who can help

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