Queenstown Redwood
“Our best chance of dealing with climate change at an acceptable economic cost is to harness the power of prices and markets to spur innovation in pursuit of profit.” says NZ Herald`s Brian Fellow.
New Zealand Institute of Economic Research also thinks that some kind of emissions trading would be a good way for New Zealand to achieve its Kyoto protocol commitments.
Market instruments are generally the preferred solution to managing stresses on natural resources (e.g. fish stocks, local air quality, water) because they provide flexibility in terms of either paying the cost of using the resource or changing activities to avoid the cost, they also provide a continuous incentive for improvement (by valuing each additional abatement) contributing to dynamic efficiency.
But not all agree with the approach. US commentator Joanne Nova, for one, raises a red flag to the apparently green solution of emissions trading. She is fearful of the economic damage fiat currencies like carbon credits can, in her view, cause. But then again, she is even concerned about the future of the United States dollar itself as a global market institution. And if we look at some other “market instruments” previously recommended by economists, such as floating the New Zealand dollar to ensure we don’t run up balance of payments deficits, one might be cautious.
Some New Zealand forestry experts are concerned that the direction the Emissions Trading Scheme is taking may not be conducive to more tree planting. The Kyoto Forest Association represents 30,000 New Zealanders and forestry companies, including me. Association spokesman Roger Dickie notes that talk about delaying the entry of some polluting sectors and possibly excluding agriculture from the scheme will impact on the domestic market for carbon credits.
So, the domestic price for carbon will remain low, which will not encourage investors to plant new trees. No private sector investor will risk their capital to plant new forests under these circumstances.
Government is listening. Nick Smith says
It is inevitable that agriculture is going to be part of domestic policy under the Emissions Trading Scheme.
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[...] … From Joanne: I just received another order from Ten Two Studios and I want you to know …Carbon Forests CLEAN & GREEN?US commentator Joanne Nova, for one, raises a red flag to the apparently green solution of emissions [...]