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Background for Forestry-ETS Stakeholder Dinner at
Carbon Forestry Conference
Purpose
1. This aide memoire provides information to support your attendance at a dinner with ETS
Forestry stakeholders on 20 August in Rotorua as part of the Carbon Forestry
Conference.
Background
1. Christina Hood, Head of Climate Compass has set up a dinner for you to meet with a
range of ETS Forestry stakeholders after day one of the Carbon Forestry Conference.
2. The stated purpose of the event is “to bring together key experts on ETS market
operations, climate policy, commercial forestry, and conservation, to exchange
perspectives and understand each other bet er.”
3. Appendix One provides information on the invited attendees.
4. Two topics for discussion during the dinner have been proposed from the invite and this
aide memoire provides you with background on each topic and some talking points.
Topic One: Perspectives on the government’s proposal to restrict forestry
registrations in the ETS.
Background
5. The National Party “Reducing Agricultural Emissions” manifesto committed to
introducing restrictions on whole farm conversions to exotic forests registering in the
ETS.
6. The manifesto details the proposed policy which includes:
i. A moratorium on land use capability (LUC) classes 1-5
ii. An annual hectare limit for LUC class 6 of 15,000 ha
iii. A 25% exemption to the above restrictions to encourage farmers to continue to plant
trees on any parts of their farmland that are unsuitable for agriculture
iv. Meeting any Treaty settlement obligations regardless of the new limits
7. The public has had limited access to the details of this policy through the manifesto and
in the Forestry chapter of the draft second emissions reduction plan.
8. There is a large amount of public interest in this policy, from the forestry sector, the
farming sector and ETS market participants.
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9. 9(2)(g)(i)
the
Minister of Forestry has clarified in correspondence and meetings with the forestry sector
the proposals are not intended to apply to existing investments.
Talking points
10. The ETS is the Government’s key tool in tackling climate change, creating a credible
market wil allow the scheme to achieve its purpose.
11. As part of a credible market the Government has committed to no major changes to how
the ETS operates and recognises the key role forestry has in meeting our emissions
targets and budgets through a least cost net strategy.
12. The ETS has created an incentive for land use change within New Zealand to exotic
forestry. This Government is interested in ensuring the right balance between farming
and forestry for our rural communities, our environment, and our economy.
13. The National Party “
Reducing Agricultural Emissions” manifesto and the draft second
emissions reduction plan have outlined the proposed policy to prevent whole farm
conversions to exotic forests from registering in the ETS.
14. The objective of the proposed policy is to protect high quality agricultural land and limit
whole farm conversions to exotic forestry.
15. This is proposed to be achieved through use of the Land Use Capability (LUC)
classification system at the point of ETS registration.
Potential questions for the group
16. What do you think is the right balance between farming and forestry land uses in New
Zealand?
17. How do you see the LUC classification system working for ETS registrations?
18. We have heard the distribution of the annual hectare limit wil be particularly important
for certainty for the sector. What are your views on how that could best be done?
19. What direction do you think the ETS and NZU price needs to take to best support
achieving our emissions targets and budgets?
20. What complementary policies or lack thereof would best support increasing your
confidence in the ETS market?
21. Do you think the ETS currently incentivises the right balance of forest type: production
versus permanent and exotic versus indigenous?
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Topic Two: Solutions for transitioning Tairawhiti to sustainable land use, including the
role of the ETS
Background
22. Cyclones Hale and Gabrielle caused significant damage to people, land, property and
infrastructure in the Tairāwhiti-Gisborne and Wairoa districts in 2023.
23. Following public calls for an inquiry, the Ministerial Inquiry into land uses associated with
the mobilisation of woody debris (including forestry slash) and sediment in Tairāwhiti-
Gisborne and Wairoa districts was announced in February 2023.
24. The purpose of the Inquiry was to describe the history of land uses associated with the
mobilisation woody debris and sediment in the Tairāwhiti-Gisborne and Wairoa districts,
and to make recommendations about the further work needed to address impacts of
land use and severe weather events.
25. 9(2)(f)(iv)
Talking points
26. The Inquiry report is clear that the fundamental outcome sought is a shift to sustainable
and resilient land uses in Tairāwhiti-Gisborne and Wairoa. The response to the Inquiry
therefore aims to achieve the following outcomes:
i. Effective clean up in the short term to accelerate recovery, facilitated by
collaborative action across local government, iwi, hapū, landowners, industry, and
communities. Actions related to this have included:
i. Standing up a Woody Debris Taskforce
ii. Providing funding assistance to Gisborne District Council (GDC) and
Hawke’s Bay Regional Council (HBRC) (for Wairoa) to undertake a flood-
capacity assessment to identify and fix critical risks to river flood-flow
capacity.
ii. Sustainable land use that meets the current and future needs of the environment,
communities and iwi, hapū, and landowners. Actions related to sustainable land use,
include:
i. Providing funding assistance to GDC to support their current plan change
workstreams relating to forestry.
27. Budget 2024 also includes several recovery and resilience commitments, including
funding for state highway and local road recovery works, funding to support community
resilience (temporary accommodation services, flood protection works, restoration of
cultural assets, removal of woody debris and sediment), and funding to bet er support
emergency preparedness.
28. These outcomes are intentionally high-level to provide both sufficient direction and
flexibility in how they are achieved. Agencies have worked with local partners to achieve
them, in a way that is locally led and centrally enabled and that reflects the unique
biophysical nature of the regions and the needs of the affected communities.
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Potential questions for the group
29. What role do you see the ETS having in ensuring afforestation is designed to best deal
with extreme weather events?
30. What role do you see in the ETS supporting the reestablishment of forests in Tairawhiti?
Additional ETS policy information
ETS unit settings
31. On Monday 12 August, Cabinet Business Committee made decisions on updating NZ
ETS settings. Due to this decision being highly market-sensitive, we wil provide talking
points to your office on NZ ETS settings separately to this briefing, later this week.
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Appendix One: Attendee list for the event
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