Skip to main content.

7 Summary of Proposed Response Measures

This scoping report aims to identify potential environmental effects of the ETS-plus at a high level, identify possible response measures to address these effects, and develop terms of reference for possible further investigations of particular areas of concern or uncertainty. Further environmental assessment of the ETS-plus will help ensure that the policy package has broad environmental integrity from the start and is broadly consistent with the Government’s overall sustainability goals.

This chapter is a summary of all of the responses, including further investigations, proposed to address the potential environmental effects of the ETS-plus.

Other conclusions of the report are summarised in the Executive Summary and are therefore not repeated here.

7.1 Response measures for energy supply and demand

Over the period to 2020, the ETS-plus is expected to lead to increased development of renewable sources of energy relative to the base case, and this effect is expected to increase as the cost of carbon rises. However, demand for energy is likely to be inelastic in the short term; even if demand growth is met by renewables, there are likely to be increased pressures on the environment.

Thus, improving energy efficiency and demand-side management are important in both the long and the short-term. In the short term, while thermal electricity is on the margin for peak electricity demand, these measures can make a useful contribution to reducing greenhouse gas emissions. Energy-efficient homes also help to address health concerns from rising electricity prices. In the medium to longer term these measures serve to reduce the pressure on the environment from renewable electricity supply.

  1. Strengthen measures to enhance energy efficiency and demand side management in the energy sector, especially but not exclusively in relation to electricity.
  2. Consider undertaking a strategic environmental assessment of the role of further hydroelectric generation in a sustainable energy system.
  3. Provide guidance on the potential use of freshwater resources for hydroelectric generation via the Sustainable Water Programme of Action.
  4. Prioritise completion of biodiversity mapping across New Zealand.
  5. Address forward planning for wind energy through the generic and cross-sectoral measures described in section .
  6. Expand the scope of the proposed NPS on renewable energy to address how adverse effects of such projects on the environment are to be avoided, remedied or mitigated.
  7. Develop a national instrument to guide identification, recording and protection of high value landscapes.
  8. Address wind and marine energy development in the Coastal Policy Statement review.
  9. Address air quality and domestic heating through improved co-ordination between central and local government (cf cross-sectoral measures).
  10. Provide assistance to low-income households to minimise the effect of the ETS in exacerbating New Zealand’s “cold home” problem.

7.2 Response measures for transport

The transport sector – both the fleet and the nation’s transport infrastructure – will have a major influence on how New Zealand meets its emissions targets. In the short-term, complementary measures within ETS-plus are likely to exert as much if not more downward pressure on emissions as the carbon price signal in diesel and petrol prices. Suggestions are made to strengthen aspects of transport modelling and planning in order to maximise the synergy between the price signal and other measures.

  1. Investigate the net contribution that biofuels are likely to make to both domestic and global GHG emissions, and consider further the potential for positive and negative environmental effects from increased production of raw material for biofuel production.
  2. Strengthen demand management measures and improve the overall coherence and alignment of existing transport sector policies with emission reduction objectives. In particular, using government funding mechanisms, seek to ensure ETS price signals are reinforced by complementary measures relating to vehicle fuel efficiency, and that patterns of land use investment do not serve to lock in higher emissions over the medium term.
  3. Improve capacity to model transport demand in response to significant changes in determinants of transport demand (eg, urban design, land use, fuel costs), and to assess the impacts of transport on GHGs and other environmental parameters.
  4. Investigate the implications of increased introduction of electric vehicles for electricity supply and demand.
  5. Significantly improve the quality of data on regional and local travel patterns, freight movements, fuel demand and emissions.
  6. Develop up-to-date measures of fuel efficiency for various transport functions, locations and modes.
  7. See also the proposed generic and cross-sectoral measures.

7.3 Response measures for agriculture

Only limited reductions in non-CO2 emissions can be expected from agriculture in the short term. Under the base case scenario, further intensification of land use is likely prior to the sector’s entry to the ETS in 2013. The ETS-plus is expected to slow the existing trend of intensification of land use and the corresponding increase in emissions and environmental effects on soil, water quality, water demand to some extent, although the large investments behind this land use change will make the emissions growth more difficult to reverse despite the ETS price signal that is proposed to apply to agriculture starting in 2013. That is, there is a risk that some of the potential benefits of the ETS-plus will not be realised.

  1. Investigate the potential long-term effects of nitrification inhibitors on the nitrogen cycle, terrestrial water quality, soil health and wetlands and identify any additional response measures required prior to widespread adoption of nitrification inhibitors.
  2. Provide adequate funding of research programmes aimed at understanding the effects of land use change on soil integrity, to enable assessment of the reversibility of land use changes occurring prior to 2013 so as to capture the full benefits of the ETS-plus.
  3. Determine as soon as possible the ETS points of obligation for the agriculture sector, including how the price signal will be passed on to farmers.
  4. Investigate the risk that the benefits of the ETS-plus will not be realised due to the delay in agriculture entering the ETS; determine the extent to which behaviour, emissions and adverse effects are likely to diverge from “optimal” if future policy settings were known with certainty.
  5. Improve understanding of the effect of different land ownership structures on land use change to better anticipate the environmental effects of ETS-plus.
  6. Monitor progress towards reversing biodiversity decline in New Zealand; this will require maintenance and updating of national databases, and measures of ecological processes that sustain indigenous species assemblages and ecosystem functions.
  7. Improve the quality of national data on significant vegetation cover, ecosystems and landscapes to enable rapid assessment of land use changes and pressures.
  8. Fill information gaps in the current FRST-funded research on land use change.
  9. Monitor the effect of land use change on soil integrity.
  10. Monitor land use change as part of a specific monitoring programme associated with the ETS.

7.4 Response measures for forestry

The ETS-plus is expected to lead to a significant reduction in emissions due to avoided deforestation and new afforestation; these will also have other positive environmental effects, especially with respect to soil erosion and water quality. The ETS-plus is also likely to cause some adverse biodiversity and landscape effects from increased exotic forest establishment. To address these risks, several response measures are proposed:

  1. Provide criteria in the AGS to ensure that areas of high biodiversity value, eg, significant post-1989 regeneration of indigenous vegetation, are not planted in exotic forestry.
  2. Include in the ETS legislation provision to ensure that NZUs are not issued for planting of exotic forest on areas of high biodiversity value.
  3. Ensure that the biodiversity mapping is completed across New Zealand as a matter of urgency.
  4. Link the AGS to the forestry best practice code to reduce environmental effects at establishment and harvesting.
  5. Provide a methodology and timeframe, eg, via a national environmental standard under the RMA, to guide local authorities in protecting landscapes of high value.
  6. Undertake further work to establish how the ETS could be modified if full carbon accounting were required by a future international agreement.
  7. Undertake further environmental assessment work if pre 1990 indigenous forests are included in the ETS.
  8. Undertake further environmental assessment if the ETS-plus is amended to create more flexibility for land use change from forestry to other land uses.

7.5 Response measures for manufacturing and mining

No significant unintended environmental consequences of the ETS-plus have been identified from the manufacturing and mining sectors, and therefore no policy response measures are proposed.

7.6 Response measures for fishing and aquaculture

Some positive environmental effects are expected as a result of the ETS-plus in the seafood sectors, but these are expected to be of limited significance. Some negative effects are also possible and warrant monitoring:

  1. Monitor for shift in fishing effort towards areas closer to ports and ensure that fisheries management tools are adequate to prevent localised depletion of fisheries.
  2. Consider whether stock assessment models, eg, models based on catch per unit effort, need to be adjusted for changes in fishing behaviour.
  3. Monitor whether changes in fishing gear or strategies give rise to any change in fisheries interactions with protected species such as seabirds and marine mammals.

7.7 Response measures for waste

The ETS-plus package is not expected to have significant unintended consequences in the solid waste sector, although there are some issues that warrant monitoring.

  1. Monitor, and assess during review of the ETS, whether air quality standards and plans are sufficient to address the potential for increased air pollution from conversion of waste to energy.
  2. Monitor whether increased cost of energy makes recycling less viable financially and, if so, consider adjusting policy settings for the proposed levy on solid waste.
  3. Monitor whether the increased cost of solid waste disposal is causing an increase in illegal tipping of wastes.

7.8 Response measures for tourism

No sector-specific response measures are proposed for the tourism sector or other service industries. To the extent that measures might help to secure positive effects of the ETS-plus in these sectors or mitigate adverse effects, they are addressed in the Energy and Transport sections above and in the generic and cross-sectoral measures, below.

To obtain a more accurate picture of likely GHG reductions in the tourism sector, further investigation could focus on the following:

  1. Investigate the impacts of higher domestic travel costs on tourism demand and travel and accommodation patterns.
  2. Investigate potential effects of future inclusion of aviation fuel in the international climate change framework.

7.9 Generic and cross-sectoral measures

A number of cross-sectoral and generic initiatives are likely to be necessary to help ensure that opportunities for positive environmental outcomes are maximised and negative environmental outcomes reduced. In general, these measures involve proactive local planning and dialogue, supported by central and regional leadership, to help deal with potential resource conflicts and environmental effects, and engage with communities over the response to climate change.

This would include:

  1. an explicit and structured partnership between central and local government around the use of the Resource Management Act
  2. more community-based, multi-stakeholder forward planning, within the context of long-term council and community plans under the Local Government Act
  3. improving the level of information available to individuals, businesses and others making decisions/choices to reduce the climate impact of their lifestyle, and respond to the price and cost signals arising from the ETS.

More detail on these generic measures, and the other response measures, can be found in Chapter 5.

[ |