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Annex 3: Policy criteria

RELEASED UNDER THE OFFICIAL INFORMATION ACT

Regardless of the uncertainties outlined in the forestry Section (4.6) about future arrangements on land-use change and forestry, or interpretation of the current rules on LULUCF, policy criteria are needed to guide the inclusion of climate change considerations into land-use change and forestry decisions out to 2020. The policy criteria are not mutually exclusive and achieving some of them will help to achieve other criteria.

The consideration of forestry and land-use change in the medium term (to 2020) should involve making policy choices based on the following criteria.

Appropriate land-use signals: Appropriate signals are sent to decision-makers involved in land use and land-use change regarding the Government's overall climate change goal and any obligations under international climate change arrangements (such as the Kyoto Protocol). This means that foresters, potential foresters and landowners face appropriate incentives to invest or divest in forestry, taking into account as many costs and benefits as possible.This includes economic costs and benefits and Kyoto Protocol/climate change implications.

Reduction of uncertainty: This requires reducing the uncertainty facing forest owners about both the international situation and domestic policy settings. This could include the removal or reduction of uncertainty around how liabilities will be treated during CP1. Similarly, it could also involve less uncertainty around the treatment of forest benefits and liabilities post-2012.

Resilience: Any policy response needs to be robust and effective over time under new international climate change frameworks or changes in targets and rules within existing international frameworks. Resilience also includes adjusting to achieve any change in New Zealand's overall climate change policy goal and being able to achieve other Government non-climate policies. Furthermore, this resilience also includes and provides for flexibility in land-use decision-making, given the appropriate signals discussed above.

Equity: Any policy response needs to consider equity between the treatment of different land uses and different forests (ie, Kyoto forests versus non-Kyoto forests), and in relation to other parts of the economy.

Sector acceptance of policy: Acceptance of the policy will aid its implementation. This includes acceptance by the owners of Kyoto forests and non-Kyoto forests.

Maximising co-benefits: There are other positive externalities that may arise from the climate change policy when applied to forestry (eg, soil conservation benefits, nutrient management and biodiversity). To the extent possible, these should be maximised.

Minimisation of Crown fiscal risk: There may be fiscal risks for the Crown; eg, retention of liabilities, or deadweight costs for the economy associated with devolution where expenditure results in no behaviour change, only a wealth transfer.

International obligations: The policy is consistent with New Zealand's international obligations (eg, the World Trade Organisation and bilateral-trade agreements and other multilateral environmental agreements such as the CBD).

Note that the options outlined in this section were not assessed against this criterion, because greater detail about each option is required in order to assess the implications of the options against any international obligations.

Feasibility: The practicality of the policy approach (eg, data needs, monitoring requirements, compliance requirements, transaction costs and enforceability).