logo.gif

Forestry and the Emissions Trading Scheme

International News

Results of the recent elections have created some uncertainty around United States involvement in the Paris Accord. While some reports are suggesting Barack Obama will try to sign the accord before he leaves office, other reports talk of Donald Trump considering ways to bypass a theoretical four-year procedure for leaving the accord.

It has to be noted that Trump seems already to be softening his stance on some of his key election promises (the “wall” is now likely to be a “fence” in places…). He may soften his position on Paris too.  Only time will tell.

Despite this future uncertainty, Canadian Prime Minister Justin Trudeau says it’s full steam ahead for his government’s environmental plan, including a national carbon price. Trudeau announced last month that he would impose a national floor price on carbon dioxide in 2018, rising to $50 per tonne by 2022.

Domestic News

Earthquake Disruptions

The recent earthquake has caused disruption to many government departments, including the Ministry for Primary Industries, and the Environmental Protection Authority (EPA). Some offices are still evacuated while awaiting inspection, so we are expecting delays in processing applications and answering queries in the short-term at least.

Climate Cheats 3 – Cook the Books

The Morgan Foundation has this month released its third “Climate Cheats” report, again accusing the government of cheating in its commitments to climate change.

The Morgan Foundation contends that the timing of a proposed rule change to allow “averaging” of carbon stocks could enable New Zealand to generate between 65 and 90 million excess credits. The excess emissions this allows equates to nearly one full year of New Zealand’s gross emissions.

The foundation believes that “this approach will violate not only the forest accounting rules agreed under the Kyoto Protocol, but also the Paris Agreement's key principle of progression."

The full report can be downloaded from here: 

 

Price Update

NZUs are currently trading at around $18.30 per NZU, a slight reduction from last month.

The figure below shows the recent carbon credit prices for EUAs, CERs, NZUs and ERUs. Note that from 1st June 2015 only NZUs or New Zealand AAUs are valid units in the NZ ETS. EUAs are valid units for trading within the European Union.

Figure 1: Recent Carbon Prices - NZ$/t CO2e – Real (CPI adjusted)