Environment Minister Nick Smith is calling on officials to re-calculate NZ’s greenhouse gas emissions because they are growing more slowly as a result of the global economic recession. He says the Govt will not set short-term targets for reducing emissions until he has an accurate picture of what future emissions will be. The Govt’s goal is to cut emissions to half 1990 levels by 2050. Under the Kyoto Protocol NZ has 4 years to trim 26% off emissions if it is to reduce them to 1990 levels by 2012. Current projections indicate NZ will overshoot the target by a quarter, leaving a substantial bill for carbon credits to cover the shortfall. But the Minister says these projections are based on assumptions about economic growth before the recession began.

A Parliamentary Select Committee is reviewing the Emissions Trading Scheme, but the Govt has not suspended it as signalled in the confidence-and-supply agreement with the ACT Party. This has cast a shadow over the emerging carbon market as forest owners prepare to start trading carbon credits under the NZ system. In the absence of any law change, trade in NZ emission units is destined to start in April. This is when owners of post-1989 Kyoto forests are scheduled to become the first group eligible to uplift NZ emission units (the credits their trees earn for storing greenhouse gas emissions).

A record is being kept of forestry participants on a MAF-run register, as required by the law passed by the Labour-led coalition last year, and six companies have signed up to file emission returns. Under Kyoto rules pre-1990 forests cannot earn credits but under the ETS they will be given credits to compensate for Kyoto penalties incurred at harvesting. National campaigned on sending the ETS law back to a Select Committee for a second round of public submissions, with amendments to be completed by September. The confidence-and-supply agreement with ACT stipulated an amendment “forthwith” would delay the scheme’s implementation till completion of the wider review of the basics, including consideration of alternatives. No amendment Bill has been forthcoming and John Key has signalled it won’t be necessary if a review is concluded quickly. Unless the law is changed or repealed, forest owners have no choice but to comply. Some authorities say the review is putting a brake on decisions to invest in new plantings.

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