1. Sustainable Land Management and Climate Change Details of Pillar 2 Public consultation meetings February-March 2007

2. Pillar 2 in detail Two key elements of Pillar 2: –Reducing emissions (agriculture and deforestation) –Enhancing forest sinks Agriculture: –Limited solutions, but some solutions around nitrous oxide (strong water quality co-benefits), –Also research, technology transfer, voluntary reporting Deforestation: –Difficult, but urgent (strong co-benefits in some areas) Afforestation: –Some good solutions available, building on PFSI (strong co- benefits for sustainable land management)

3. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

4. Research, technology and voluntary reporting 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Figures from http://www.landcareresearch.co.nz

5. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

6. 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops Research, technology and voluntary reporting

7. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

8. 3. Voluntary reporting Voluntary reporting of emissions at the farm level Research, technology and voluntary reporting Methane Nitrous oxide Figure from http://www.landcareresearch.co.nz

9. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

10. Government pricing mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors Picture from http://www.atmosphere.mpg.de

11. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

12. Government pricing mechanisms 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers Photo from www.digitalearth06.org.nz

13. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

14. Market-based mechanisms 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers

15. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

16. Market-based mechanisms 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc

17. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

18. Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls Photo from http://www.nscc.govt.nz

19. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

20. Land use change from forestry to agriculture 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture Photo from http://www.landcareresearch.cri.nz

21. 9. RMA standards to control new agricultural land use after deforestation Controlling the greenhouse gas emissions and other effects arising from land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture Government pricing mechanismsMarket-based mechanisms 4. Incentive for nitrification inhibitors Pay a financial incentive to encourage the use of nitrogen inhibitors 6. Tradable permit regime for agriculture emissions Devolution of agriculture greenhouse gas emission obligations and permits to farmers Price-based measures 5. Charge on nitrogen fertiliser Impose a charge on nitrogen fertilisers 1. Research Research into adaptation, mitigation and measurement technologies and practices for methane and nitrous oxide Research, technology transfer and voluntary reporting 2. Technology transfer Use of demonstration farms to promote adoption of mitigation technologies e.g. nitrogen inhibitors, nutrient budgeting, improved forage crops 3. Voluntary reporting Voluntary reporting of emissions at the farm level 7. Offset schemes for agricultural emissions Farmers required to offset emissions by emission reductions elsewhere i.e. tree planting, biofuels etc Regulation 8. RMA standards to control agricultural greenhouse gas emissions Development of a National Environmental Standard to control agricultural greenhouse gas emissions: i.e. input and/or output controls LONG-TERM OPTIONSOPTIONS FOR ENCOURAGING EMISSIONS REDUCTIONS NOW Options focusing on land use change from forestry to agriculture Overview of possible Pillar 2 options for agriculture (page 43)

22. Land use change from forestry to agriculture 10. Charge where deforested land is used for agriculture Impose a charge on agriculture emissions created when land is converted from forestry to agriculture

23. Kyoto Rules for Forests PlantingHarvestingDeforestation (change of land use) Pre-1990 No creditsNo costCost Post-1990 Credits ( retained by Government) Cost (retained by Government)

24. Incentives 1. Afforestation Grants Scheme (AGS) Pay grants to growers who plant new post- 2007 forests Price-based measures 1. Flat charge on land use change from forestry to another use Impose flat charge on deforestation of non-Kyoto forests 2. Tradable permit regime Government allocates tradable deforestation permits; forest owners who deforest non-Kyoto forests are liable for emissions above the level of permits they hold 2. Choice between AGS and devolution of sinks & liabilities Give each grower the choice to receive the relevant sink credits and liabilities or seek a grant under the AGS AFFORESTATION OPTIONS Regulation 4. RMA options Use RMA to control deforestation 3. Centrally determine deforestation levels option Pass new legislation to limit rates of deforestation of non-Kyoto forests (national deforestation limit) DEFORESTATION OPTIONS Overview of possible Pillar 2 forestry options (pages 57 & 62) Market-based measures Government pricing measures

25. Afforestation options 1. Afforestation Grants Scheme (AGS) Pay grants to growers who plant new post- 2007 forests

26. Incentives 1. Afforestation Grants Scheme (AGS) Pay grants to growers who plant new post- 2007 forests Price-based measures 1. Flat charge on land use change from forestry to another use Impose flat charge on deforestation of non-Kyoto forests 2. Tradable permit regime Government allocates tradable deforestation permits; forest owners who deforest non-Kyoto forests are liable for emissions above the level of permits they hold 2. Choice between AGS and devolution of sinks & liabilities Give each grower the choice to receive the relevant sink credits and liabilities or seek a grant under the AGS AFFORESTATION OPTIONS Regulation 4. RMA options Use RMA to control deforestation 3. Centrally determine deforestation levels option Pass new legislation to limit rates of deforestation of non-Kyoto forests (national deforestation limit) DEFORESTATION OPTIONS Overview of possible Pillar 2 forestry options (pages 57 & 62) Market-based measures Government pricing measures

27. Afforestation options 2. Choice between AGS and devolution of sinks & liabilities Give each grower the choice to receive the relevant sink credits and liabilities or seek a grant under the AGS

28. Incentives 1. Afforestation Grants Scheme (AGS) Pay grants to growers who plant new post- 2007 forests Price-based measures 1. Flat charge on land use change from forestry to another use Impose flat charge on deforestation of non-Kyoto forests 2. Tradable permit regime Government allocates tradable deforestation permits; forest owners who deforest non-Kyoto forests are liable for emissions above the level of permits they hold 2. Choice between AGS and devolution of sinks & liabilities Give each grower the choice to receive the relevant sink credits and liabilities or seek a grant under the AGS AFFORESTATION OPTIONS Regulation 4. RMA options Use RMA to control deforestation 3. Centrally determine deforestation levels option Pass new legislation to limit rates of deforestation of non-Kyoto forests (national deforestation limit) DEFORESTATION OPTIONS Overview of possible Pillar 2 forestry options (pages 57 & 62) Market-based measures Government pricing measures

29. Government pricing mechanisms 1. Flat charge on land use change from forestry to another use Impose flat charge on deforestation of non- Kyoto forests Picture from Google Earth

30. Incentives 1. Afforestation Grants Scheme (AGS) Pay grants to growers who plant new post- 2007 forests Price-based measures 1. Flat charge on land use change from forestry to another use Impose flat charge on deforestation of non-Kyoto forests 2. Tradable permit regime Government allocates tradable deforestation permits; forest owners who deforest non-Kyoto forests are liable for emissions above the level of permits they hold 2. Choice between AGS and devolution of sinks & liabilities Give each grower the choice to receive the relevant sink credits and liabilities or seek a grant under the AGS AFFORESTATION OPTIONS Regulation 4. RMA options Use RMA to control deforestation 3. Centrally determine deforestation levels option Pass new legislation to limit rates of deforestation of non-Kyoto forests (national deforestation limit) DEFORESTATION OPTIONS Overview of possible Pillar 2 forestry options (pages 57 & 62) Market-based measures Government pricing measures

31. Market-based mechanisms 2. Tradable permit regime Government allocates tradable deforestation permits; forest owners who deforest non-Kyoto forests are liable for emissions above the level of permits they hold Picture from Google Earth

32. Incentives 1. Afforestation Grants Scheme (AGS) Pay grants to growers who plant new post- 2007 forests Price-based measures 1. Flat charge on land use change from forestry to another use Impose flat charge on deforestation of non-Kyoto forests 2. Tradable permit regime Government allocates tradable deforestation permits; forest owners who deforest non-Kyoto forests are liable for emissions above the level of permits they hold 2. Choice between AGS and devolution of sinks & liabilities Give each grower the choice to receive the relevant sink credits and liabilities or seek a grant under the AGS AFFORESTATION OPTIONS Regulation 4. RMA options Use RMA to control deforestation 3. Centrally determine deforestation levels option Pass new legislation to limit rates of deforestation of non-Kyoto forests (national deforestation limit) DEFORESTATION OPTIONS Overview of possible Pillar 2 forestry options (pages 57 & 62) Market-based measures Government pricing measures

33. Regulation 3. Centrally determine deforestation levels option Pass new legislation to limit rates of deforestation of non- Kyoto forests (national deforestation limit) Picture from http://icm.landcareresearch.co.nz

34. Incentives 1. Afforestation Grants Scheme (AGS) Pay grants to growers who plant new post- 2007 forests Price-based measures 1. Flat charge on land use change from forestry to another use Impose flat charge on deforestation of non-Kyoto forests 2. Tradable permit regime Government allocates tradable deforestation permits; forest owners who deforest non-Kyoto forests are liable for emissions above the level of permits they hold 2. Choice between AGS and devolution of sinks & liabilities Give each grower the choice to receive the relevant sink credits and liabilities or seek a grant under the AGS AFFORESTATION OPTIONS Regulation 4. RMA options Use RMA to control deforestation 3. Centrally determine deforestation levels option Pass new legislation to limit rates of deforestation of non-Kyoto forests (national deforestation limit) DEFORESTATION OPTIONS Overview of possible Pillar 2 forestry options (pages 57 & 62) Market-based measures Government pricing measures

35. Regulation 4. RMA options Use RMA to control deforestation