Unrest in the forest; trouble with the trees

My column from the Saturday Dom Post and Christchurch Press. Looks like I'm stuck behind the paywall; there should be an ungated version up at The Initiative's website in due course [now linked].

A snip:

Federated Farmers and Beef and Lamb New Zealand have stepped up their campaigns against carbon forestry.

Federated Farmers objected to a Dutch company’s purchase of two sheep and beef farms for tree-planting, arguing it would mean fewer jobs and people in rural towns.

Beef & Lamb New Zealand commissioned work pointing out that New Zealand’s emissions trading scheme (ETS) is friendlier than others to forestry, while suggesting that the difference is not to New Zealand’s benefit.

How the Government responds will provide a signal about whether the country is serious about getting to Net Zero. Kicking trees out of the ETS would set a very poor precedent.

The problem with the ETS isn’t that it encourages carbon sequestration in trees. The ETS is, and should be, focused sharply on reducing the country’s net emissions. That’s what it was built to do, and that’s what the Zero Carbon Act’s Net Zero target requires. Our being out of step with other countries is not always a fault. We do get some things right occasionally.

The problem rather is that any large change in technology, or big movement in prices of different goods, brings lots of other changes – some of which require direct regulatory responses.

If the Government’s response to these problems is to break the Emissions Trading Scheme, rather than deal with issues as they emerge, at the level of government most suited to each problem, our entire climate response is in jeopardy.

This is just Tinbergen. Multiple targets require multiple instruments. The ETS is there to target net emissions. Targeting net emissions will mean a whole pile of relative prices change, behaviour changes, and some emergent outcomes may be undesirable for whatever reason. 

Rather than run piecemeal changes to the ETS whenever that happens, target the undesirable outcome directly in whatever least-bad way is available.