WELLINGTON, Aug. 2 (Xinhua) -- New Zealand is the first, and still the only, country to fully include forest landowners in a greenhouse gas emissions trading scheme, the New Zealand Emissions Trading Scheme (NZ ETS), according to a report released on Wednesday.
The report released by Motu Economic and Public Policy Research examines how forest owners have responded to the NZ ETS and the reasons to be optimistic about the future.
The NZ ETS is designed to incentivize the planting of additional forests, for example, planting that would not have occurred in the absence of the scheme, said Suzi Kerr, senior fellow at Motu Economic and Public Policy Research and lead author of the report.
"Plantation foresters responded to the financial incentives from the NZ ETS in a rational way. Unfortunately, due to international changes and the local regulatory responses to them, those incentives were weak at best and sometimes perverse," said Kerr.
Carbon sequestration by forestry continues to be an important part of New Zealand's contribution to its global obligations to reduce emissions, and ETS prices over the last year have been high enough to make forestry profitable again, she said.
"There are definitely reasons for optimism when it comes to forestry and emissions trading," Kerr said, adding that if the price remains high, and foresters can trust the scheme not to change, owners of marginal land and forest are likely to avoid deforestation, plant new trees, extend harvest rotations and replant after harvest.
"We do however, need to be careful about changes to the system that can either give windfall gains or create extra complexity with little gain," she said.
The research "Including Forestry in an Emissions Trading Scheme: Lessons from New Zealand" was undertaken through the program "Shaping New Zealand's Low-Emission Future."
