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8 Emissions Trading: Issues for Māori

This chapter addresses the implications for Māori of an ETS, including:

  • themes from the hui held on climate change and energy in March 2007, and the process going forward
  • implications of the Treaty of Waitangi
  • the potential impacts on Māori of an ETS.

8.1 Māori relationship with the environment

Māori are inextricably linked to – and involved with – the sustainable management and use of natural resources. A Māori world view shapes a special relationship with the environment, expressed inter-generationally through kaitiakitanga.88 The environment forms the basis from which cultural, spiritual and physical and economic sustenance flows. Māori beliefs and understandings regarding the environment provide an all-encompassing framework and motivational basis from which to respond to the challenges posed by climate change.

Land and water management practices based on an understanding of environmental systems have historically supported Māori efforts to maintain and sustain their families and communities. Climate change is a global issue that will have an effect on the relationship that Māori have with the environment and on the Māori use of natural resources, especially in coastal communities. Coastal areas are of traditional importance to Māori. Many areas are significant for cultural, historical, social and economic reasons and are intrinsic to Māori identity. In addition, the coastal environment is an important food resource. Coastal erosion and changes to the productivity of inshore fisheries and shellfish gathering areas could therefore have significant social, cultural and economic impacts on Māori in some regions.

Climate change presents considerable challenges to all landowners and managers, including Māori. Many areas of Māori land are steep and in regions vulnerable to storms and erosion. With the onset of climate change these lands will be even more exposed and vulnerable with the predicted arrival of more frequent and severe storms, and more frequent droughts in the east of New Zealand. In the forestry sector, deforestation (defined under Kyoto as conversions of forested land to other uses) is a major issue and one of the leading causes of climate change globally. Moreover, deforestation can have other potential negative environmental effects, such as increasing the risk of flooding. Taking action to prepare for the impacts of climate change is therefore critical.

8.2 Themes from February–March 2007 hui

In February–March 2007, the government held 13 hui on the policy options outlined in the five climate change and energy discussion documents. One of the key messages that emerged from the hui was that Māori agree that climate change is a real and important issue. Māori participating in the hui were well aware of the potential impacts of climate change on lands, waterways, flora and fauna, and food sources.

Strong feelings that Māori perspectives in relation to climate change should be adequately considered and the proposed policies should protect the environment, were heard at the first hui in Gisborne and became a recurring message. The need for Māori input into policy development alongside quality engagement was another key theme. Other themes related to the Treaty of Waitangi, government co-ordination and leadership, consultation, Māori-specific analysis, equity, impacts on Māori, and issues specific to certain regions.

Māori have generally acknowledged at earlier hui that greenhouse gas emissions are a global issue and that there is a need to change and/or modify activities that contribute to climate change. This has been seen as intrinsic to the kaitiakitanga role that Māori have in relation to the environment and its general wellbeing.

The Māori economy is reliant on the primary industries of agriculture, forestry and fishing for its prosperity. These sectors are those most directly affected by the changing weather patterns associated with climate change. By reducing greenhouse gas emissions - the main contributor to climate change - we can help reduce the impact of climate change.

Māori have significant interests in land management through ownership and management interests in large areas of pastoral farmland, and exotic and indigenous forests. As Treaty of Waitangi claims are progressively settled, Māori ownership of rural and productive land is expected to increase.

8.3 Potential issues and opportunities from the NZ ETS for Māori

The NZ ETS will help reduce emissions relative to business as usual, encourage and support global action on climate change, and help to put New Zealand on a path to sustainability.

Becoming more sustainable and dealing with climate change are important elements of the government’s strategy for economic transformation. The government believes that the transformation to a more environmentally sustainable economy will open up opportunities for New Zealand firms. New Zealand is already a world leader in existing technology in important areas such as agriculture, forestry and biotechnology. There will be significant new economic opportunities for those who are at the forefront of the development of new carbon-friendly technologies.

The government recognises that the ETS could have both costs and benefits for many in the community, including Māori. The broader the coverage of the ETS, the more equitable it will be across sectors, and the more opportunities there will be for least-cost emission reductions.

Emissions trading will mean an increase in the costs of products such as petrol and electricity, and the government is developing ways to assist households, firms and industry sectors with the transition process. Of particular importance to Māori will be the potential impacts of the NZ ETS on Māori involvement in the primary industry sectors of forestry, agriculture and fishing, because these sectors dominate Māori economic development.

The government is undertaking a study of the impacts of the NZ ETS on Māori, which will inform policy development on the potential effects of an ETS on Māori. Impact analysis will be particularly relevant in places where there is a high level of social and economic reliance on agriculture and forestry related activities in remote rural regions of New Zealand that sustains high Māori populations through employment.

Under the ETS, the government will issue a number of emission units (New Zealand Units) through a combination of sale (by auction) and free allocation (gifting). Decisions about free allocation to participants in the ETS will be determined sector by sector, according to the likely impact of emissions pricing and the sector’s ability to pass emission costs on to consumers.

These opportunities and issues for Māori associated with the introduction of the NZ ETS are likely to be discussed at the upcoming hui in September and October this year. The government’s report on the analysis of the economic and socioeconomic impacts of the NZ ETS on Māori will inform these discussions.

8.3.1 Māori land use: agriculture and forestry

Māori have significant interests in land management through ownership and management of large areas of pastoral farmland, and exotic and indigenous forests. However, the primary production sectors are also the most directly affected by the changing weather patterns associated with climate change.

For Māori, balancing the need to invest in economic opportunity with the need to address environmental sustainability is an important issue, given that the primary industry sectors of agriculture, forestry and fishing dominate Māori economic development. For example, the increased fertiliser use associated with the conversion of forested land to pastoral land uses such as dairying has the potential to negatively affect the health of waterways and lakes through increased nutrient run-off.

There will be significant economic opportunities for Māori-owned forestry under the NZ ETS in terms of the potential to earn emission units for carbon sequestration on land afforested after 1989. In addition, the Permanent Forest Sink Initiative (PFSI) is expected to operate as a niche within the NZ ETS, and will be an attractive alternative land use for marginal hill country where the economic returns to pastoral farming can often be slender. A significant proportion of Māori land falls into this category. Outside of the ETS, the Afforestation Grant Scheme (AGS) – if it becomes policy – will be an incentive for Māori investors in smaller areas of forestry who may not be attracted to the NZ ETS because of compliance costs and associated liabilities. The NZ ETS, the PFSI and the AGS will also assist with adaptation to the expected impacts of climate change in a variety of ways, such as helping to reduce and prevent erosion and flooding damage.

In the agricultural sector, an option is for the government to allocate emission units directly to farmers on the basis of historical emission levels or some other proxy for emissions. The key advantage of this option is that farmers would capture the benefits of the free allocation, offsetting lost profits and impacts on land prices. Allocating to farmers would be challenging, however, because there is a range of ownership structures to consider and agricultural land use frequently changes over time, meaning that static allocations based on a single year or reference period will fall out of alignment with land use over time. There would also be issues relating to new entrants and competition to address.

Under the NZ ETS, the government has decided in principle to assume the liability for 21 Mt CO2-e from 2008 to 2012, consistent with previous commitments. It will provide this assistance through the free allocation of emission units to the owners of pre-1990 exotic forest land.

For some, particularly larger Māori landowners, deforestation liabilities under the NZ ETS will be balanced by the opportunity to gain credits from post-1989 forests. Others, however, may consider that the ETS may affect their land development options. These may be issues for Māori to consider.

8.3.2 Geothermal and electricity production

Although geothermal energy is a renewable resource, it still has a carbon footprint. CO2 and CH4 are contained in geothermal fluid, which is released when the fluid is used and/or converted into steam. These emissions are covered by the scheme because they are in excess of what would occur naturally and are therefore anthropogenic. This is consistent with the Kyoto Protocol. Under the ETS, an obligation would be placed (from 1 January 2010) on the extraction of geothermal fluid for electricity generation or industrial process heat and not to retail operations such as motels and public baths. This may have implications for Māori who are active in the geothermal energy production sector.

8.4 The process going forward

Climate change policy development will continue to take account of the views expressed by Māori as Treaty partners with the Crown, through consultation, engagement and submission processes. Hui with Māori are scheduled over October this year to discuss the government’s proposal for an ETS.

8.4.1 The Treaty of Waitangi

The government has considered the perspectives put forward by Māori during the hui and in submissions on the climate change and energy discussion documents with regard to the Treaty of Waitangi. The government’s current view is that there is no pre-existing property right to emission units. Rather, the enactment of domestic legislation may create an interest and define the parameters of any interest arising from an ETS. The upcoming engagement with Māori will help inform understanding and analysis of Treaty issues.

88 Kaitiakitanga means the exercise of guardianship by the tangata whenua of an area in accordance with tikanga Māori in relation to natural and physical resources, and includes the ethic of stewardship.