Skip to main content.

Appendix 1: Excerpt from Project Brief: Scoping Report for an Environmental Assessment of the NZ ETS

Scope of proposed work

This project includes two tasks:

  • Task 1: Preparing a scoping report for an environmental assessment of the NZ ETS.

  • Task 2: Conducting an information-gathering workshop with stakeholders and policy experts.

The methodology for each task is discussed below in part 3 of this proposal.

Task 1: Preparing a scoping report for an environmental assessment of the NZ ETS

The scoping report will cover the following three areas:

  1. Environmental effects: At a high level, it will identify and analyse any significant domestic environmental sustainability concerns and opportunities in respect of the NZ ETS and closely related aspects of sectoral policies and measures.
  2. Response mechanisms: At a high level, it will propose domestic policy mechanisms (enhanced existing and new) by which these can be addressed and indicate the appropriate governance level, taking into account existing governance arrangements, regulations and policies.
  3. Environmental assessment terms of reference: It will prioritise the environmental impacts and response mechanisms to be analysed in greater depth in the environmental assessment. It will also recommend the terms of reference for the environmental assessment, including the scope, general methodological approach, key assumptions, primary information sources, and anticipated constraints (including uncertainty and lack of information).

Environmental effects

With regard to the analysis of environmental effects, the scoping report will include the following (at a high level):

  1. The likely significant effects of the NZ ETS (and closely related government policy) on the domestic environment,104 which may include issues such as greenhouse gas emissions, biodiversity (including indigenous flora and fauna), human health, soil, water, air, and landscape.
  2. Characterisation of these effects, including their relative significance; their spatial location; whether they are temporary, permanent and/or cumulative; whether they are synergistic; and whether they are positive or negative.
  3. The extent to which such effects are addressed under, consistent with or contrary to existing government regulations and policies, including the RMA, the NZBS, and broader sustainability objectives.

Examples of environmental effects to be assessed include:

  • afforestation pressures on existing and regenerating natural ecosystems and landscapes

  • pressures on land, water and coastal resources from increased use of renewable energy, including pressures on natural rivers from expanded use of hydroelectricity

  • pressures on landscapes and other amenity values from new generation of renewable energy

  • changes in soil carbon as a result of changes in land use and land use practices

  • air quality improvements or deterioration in both rural and urban areas

  • public health co-benefits

  • forest cover and land-use impacts on erosion control in unstable regions as well as catchment water quality/quantity

  • changes in freshwater flows and freshwater quality from change in land use practices, including, eg, changes in fertiliser use patterns

  • changes in biodiversity through changes in land use, eg, permanent indigenous forest sinks

  • biosecurity benefits or increased risk factors

  • environmental aspects of the use of nitrification inhibitors and other agricultural emission mitigation technologies.

Response mechanisms

Response mechanisms could mitigate negative environmental impacts or enhance opportunities for achieving greater positive environmental benefits. Response mechanisms could be integrated into the NZ ETS design when they are compatible with its objective; otherwise, they could be implemented outside of the NZ ETS as complementary measures, eg, via RMA mechanisms. Response mechanisms could include options for measuring and monitoring the ongoing environmental effects of the NZ ETS such that they can be considered in the review of the NZ ETS prior to the end of the first Kyoto commitment period and subsequent commitment periods. In proposing response mechanisms relating to the design of the NZ ETS, the report will give regard to their consistency with the objective of the NZ ETS.

Methodology

The project team will utilize its expertise and existing analysis and information to identify the key issues and potential environmental impacts of the NZ ETS. The project team will analyse the environmental issues using a matrix approach, that is, considering the response of each of the main economic sectors to the NZ ETS price signal and also considering how various natural resources could be impacted by changes in human activity prompted by the NZ ETS. The team will also consider different scenarios, based primarily on different prices of emission units and how this will stimulate changes in business and household activity. The project team will then “ground truth” this information in the workshop with officials and key stakeholders, and utilise this feedback to prepare the draft report. A final report will be submitted after feedback from officials and the Climate Change Leadership Forum.

The workshop needs to include local government officials, representatives from environmental NGOs and key business sector interests as well as central government officials. The number of participants is likely to be approximately 30 people (although holding it in late January might result in a lower than desirable response rate). In order to ensure that the workshop is effective with these numbers, the workshop will include small breakout groups of 6–8 people each, facilitated by members of the project team. Each group will discuss one or two issues in depth, including what methodological approach, key information and assumptions would be appropriate for a more detailed environmental assessment of the NZ ETS.

Risks

The timeline and limited budget create some risks that could affect the quality or timing of the report. The limited budget means that issues will only be considered at a high level based on existing knowledge – any modelling or other more in depth analysis would need to be done in the second phase, ie, the environmental assessment itself.

In addition, the need to submit a draft report by the end of January,105 and to hold the workshop prior to that, means that in all likelihood some key stakeholders will not be available, and that this will reduce the effectiveness of the workshop. This risk could be mitigated to some extent if officials are able to notify potential participants prior to Christmas.

104 Note that the scope of the report will not include social, economic or cultural impacts of the NZ ETS. These considerations are being addressed through other mechanisms.

105 Note from the authors: This timeline was subsequently altered.

[ |