The New Zealand Emissions Trading Scheme (ETS) is an important financial lever, to send price signals to producers, consumers and investors, and to promote sustainable outcomes in New Zealand.
Currently, the ETS falls short in driving significant reductions in gross emissions. This was caused by a noticeable increase in forestry investments and speculative holding of units, which then led to lower prices. The cooling of prices was largely driven by government intervention and increased political uncertainty.
Considering the current state of the ETS, the importance on valuing long term environmental and social impacts, and the feedback of our partners and stakeholders, The Centre for Sustainable Finance: Toitū Tahua (CSF) endorses the Government’s proposed reform of the ETS, including the redesign of the permanent forest category.
Key points of the submission:
- The ETS is a critical component of a just and equitable climate transition, but it is also only one part. Ensuring it is part of a broader policy portfolio is crucial to achieve the desired outcomes.
- The role of the ETS is to achieve gross emissions reductions, which requires a strong emissions price signal from the Government.
- Maintaining investor and landowner certainty and confidence is crucial through any changes to the ETS.
- Our preference is for options 3 & 4 from the review documentation, but more information on these should be provided before any changes to the ETS are finalised.
