Consultation on Proposed Changes – 2012

The Emissions Trading scheme

1. General Scheme Changes ‘One for two’ surrender obligation phases out in three equal steps from 2013 to 2015 $25 fixed price option kept until at least 2015 Ability to auction NZUs within an overall cap Ability to restrict international units

2. Agriculture and Forestry Changes Ability to delay agriculture’s entry Offset deforestation of pre-1990 forestry Review pre-1990 forest compensation

Transition phase Phase out ‘one for two’ more gradually: o67% obligation 2013 o83% 2014 ofull obligation 2015 $25 fixed price option kept until at least 2015

Supply of New Zealand Units Manage supply of NZUs through auction to reduce excessive buying of international units Supply of NZUs auctioned and allocated would match target level of emissions Also propose ability to restrict proportion of international units that could be surrendered

How Auctioning Could Work Target level of emissions NZUs Allocated to Industry and Agriculture Extra NZUs Auctioned by Govt Actual emissions Difference met via post 89 forestry or international units

Ability to delay agriculture’s entry (for three years) Conditions:  technologies are available to reduce these emissions  our international competitors are taking sufficient action on their emissions in general.

Offset deforestation of pre-1990 forest

The Offset Forest (International Guidance) Conditions for new forest:  Available from start of 2013  Minimum area and carbon equivalent  Not on land that is already forest land  Planted - not natural regeneration  New class of forest – would not earn credits

Review second tranche of pre-1990 compensation a.Full removal of allocation b.Reduced allocation c.Remove compensation for those who opt to offset

Under 50 Hectare allocation or exemption ? Ability to revisit a earlier decision to seek an allocation – if second tranche reduced or removed.

Consultation 1.What do you think of the overall package of proposed changes?

Consultation 2.Should the second tranche of compensation to pre-1990 forest landowners be adjusted in light of offsetting?

Consultation 3.If compensation is adjusted for the second tranche, which option for the second tranche do you prefer? Why? a.full removal b.reduced compensation c.removal for those who opt to offset

Consultation 4.If you prefer 3b, what is the most desirable way to do this? Why?

Consultation 5pm, 11 May 2012 See Submissions to: