Iwi leaders complain weak ETS destroying Maori asset values

Select committee chairman Todd McClay

BUSINESSDESK: The peak Maori body advising the government on climate change issues says the weak provisions intended for the Emissions Trading Scheme are robbing Maori of hundreds of millions of dollars by depressing the value of New Zealand carbon credits attached to Maori forestry holdings.

The comments coincide with the value of a New Zealand Unit (NZU) dropping back below $3, a historic low point, for the second time in a month, as a glut of European carbon credits combines with New Zealand's policy to allow local greenhouse gas emissions to be offset by unlimited foreign-sourced carbon credits.

The Climate Change (Emissions Trading and Other Matters) Amendment Bill is due to be reported back to parliament by the finance and expenditure select committee tomorrow afternoon, with chairman Todd McClay telling BusinessDesk not to expect significant changes to key policy decisions.

That indicates no change to the government's determination to entrench existing transitional arrangements for the ETS indefinitely, while international consensus emerges around a new global deal on climate change to replace the Kyoto Protocol.

The protocol's first four-year commitment period ends this year, but efforts to sign up to second commitment period have failed so far and alternative global arrangements are emerging.

These trends reflect the increasing contribution of fast-growing emerging economies to carbon emissions and the unwillingness of developed countries to shoulder new costs during economic hard times.

Meanwhile, the European Union's ETS remains mired in over-supply of credits, which has seen carbon prices plummet and go lower this week with the release of a new tranche of Ukrainian forest-based credits.

The lowest-quality European credits, known as Emissions Reduction Units or ERUs, were trading below $2 a tonne today, with a buy price quoted by Westpac of $1.85 a tonne.

In an open letter to Climate Change Minister Tim Groser, the climate change iwi leaders group chairman, Apirana Mahuika, accuses the government of a "fundamentally flawed" approach which was undermining both the value of NZUs and the durability of Treaty of Waitangi settlements involving forests.

"The proposed government policy not to restrict cheap international unit imports cuts across existing Treaty settlements that will have assumed stable ETS policy," the letter says.

However, supporters of the government proposals equally argue it keeps ETS policy stable by refusing to intervene in the carbon market and pursuing a "least cost of compliance" for major emitters.

The transport fuels, electricity and stationary industry sectors which do not export are all required to buy carbon credits to match 50% of their annual carbon emissions at a maximum value of $25 a tonne.

Have sunk ever lower

When the scheme came into existence in 2010, it was assumed carbon prices would quickly go higher than $25 a tonne, but they have instead sunk ever lower, partly because of slow global growth and because of the European market oversupply.

That, in turn, is hitting the value of credits attached to plantation forests, with Maori-owned forests accounting for 30% of all credits on issue, making Maori the largest single holder of NZUs.

Pending Treaty settlements could increase that to around 38% of the total, the letter says.

At the current value of $3, the 30 million NZUs already issued to Maori forest owners is valued at $90 million, compared to $600 million if the carbon price for NZUs were $20, still $5 below the current price cap.

"Based on this analysis of current NZU holdings, the ETS policy prop0osed in the bill (with no import cap) will cost iwi interests between $210 million and $510 million.

"But the impact will materially worsen for iwi/Maori where the cost to iwi assets will rise to between $294 million and $714 million," says Mr Mahuika in the letter, which is widely copied to opposition politicians and key Maori bodies, although not including the Maori Council.

The iwi leaders groups and the Maori Council have been at odds over the government's approach to recognising Maori rights and interests in fresh water ahead of the partial privatisation of state-owned electricity companies.

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21 Comments & Questions

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Its always about the money !
The Ets scam is and always has been a means to profit from fraudulent climate nonsense and the arrival of Gore continuing to spread the lies is further proof they care nothing about the environment as long as the wallet bulges with ill gotten gains.
I couldn't care less if the local maori have lost on the deal.

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Finally outside 'validation' that the ETS is an unmitigated con. Thanks Bro'.

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They have a point.

On the other hand, is it worth all the admin costs if the price is below $2. Not worth it!

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You can bet that "Iwi leaders" will always be foloowed by either: complaining, demanding, threatening ; usually all 3.

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Sounds like they may want to call the settlements "invalid"...

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"Iwi leaders complain" -- what else do they ever do?

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DOH!
And here I was thinking that if you wanted to grow the environmental pest called "pine" it would be for the timber??
Ho hum and hidey hi; it's off to the waitangi tribunal again for some more compensation.

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So Carbon Credits were essentially junk ; just like the "scientific" case for AGW.
That's a surprise then!

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Hmm.. on your analysis the following also comprise "junk" scientific cases:
- theory of evolution
- germ theory
- quantum physics
Amazing how people become slaves to their own positions in the face of data that tells them otherwise.

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Just look at the temperature record. NOAA and UK met office confirmed no temp rise in the last 16 years.
So where's your Global Warming then? That's why carbon credits are junk.
So how about commenting on the subject rather than using a deflection arguement that is not related.

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Prior to his election, the irony is Shonkey labeled the Emissions Tax Scam as a hoax.

He was right...

or is his government the hoax for foisting the scam on NZ as a shining lamppost of stand alone international economic idiocy...?

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Markets rise and fall no matter who you are get use to it.... unless you are a Rothchild then you can control it

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The EU is struggling to keep the cost of carbon credits above $2/t. Soon we'll be paying coal companies to produce more carbon so that the price of carbon credits goes up. This is a total fraud against taxpayers.
When this whole scam collapses, not because the "scientists" admit they got it wrong ( that'll be when they're dead and a laughing stock ) , but because the whole scam costs more than any perceived benefits drive politicians to park it deep down their priority lists, then be sure that all those who invested in high carbon credit price type schemes will be bellowing about getting their money back. Maori's who "sold" carbon credits on forests will still get to cut the trees down and keep their ill gotten carbon credit payments funded by motorists and other taxpayers.

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Try this for a reality check from the UK.....now sick of the psuedo-green hijacking:
"A report recently submitted to BIS compared the impact of energy and climate change policies on electricity prices for energy intensive industries for a selection of major economies including the UK, China, Japan, Russia, the US, France and Germany.1 The findings were quite shocking. “Green policies” had already added more to Britain’s electricity prices than in any other country putting our manufacturing industry at a major cost disadvantage. Moreover, the cost disadvantage was projected to worsen by 2020. This really is a matter of shooting industry in the foot.
Britain’s “green policies” are so uniquely disadvantageous because of the extraordinarily “challenging” combination of climate change and renewables targets that is driving energy policy in this country. By the Climate Change Act (2008) Greenhouse Gas (GHG), principally CO2, emissions are to be cut by 34pc by 2018-22 and by 80pc by 2050 compared with the 1990 level. These are draconian cuts and tougher even than the EU’s. Whether this masochistic zeal is worth the huge costs involved doubtless depends on your views on the reality of anthropogenic global warming. But it is enlightening to put Britain’s, and indeed the EU’s, CO2 emissions into some global context. Britain’s CO2 emissions are about 1.5pc of the world total and even the EU27’s share is only 12pc. Meanwhile China’s emissions, at nearly 24pc of the global total, are rising quickly. Where we lead others including China and India may follow – but probably not."
Britain are about to clear fracking and have never been afraid of mining. Time to leave the pseuds to Dotcom, compromised beneficiary details and that sort of trivia.....

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With respect to the views shared, the point is being missed and it may surprise you hear the issue is not about global warming. The discussion moved on long ago.

At its core, the point of the ETS is about how can we make, & use, energy more efficiently? Without a mechanism to encourage the oil, power & transport companies to invest in ways of improving these aspects of their business, things will continue on unabated.

I'm not a believer in GW, nor am I a non-believer. But I get the concept that we should encourage entities invest in areas of their business which will benefit us all with a cleaner environment, lower. So thats enough for me to support that mechanism - the ETS.

Maori are not being unreasonable & simply stating the position affecting EVERY other forest owner out there.

A tripling of the carbon price would still leave the emitters a good margin in their pricing structures, therefore the ETS is failing to achieve its purpose at current levels. Thats the real crime.

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No GM, the crime is the imposition of a tax on energy production, and a tax that is based on BS. In the USA, high energy prices have led to huge technology leaps, and now there is so cheap gas that industries the need cheaper electricity will consider moving from China to the US. Even Methanex is modifying it's plants to be mobile to take advantage of technology driven cheap energy.
Instead of science being harnessed to find solutions to cheaper energy, they are harnessing taxpayers funds to try to justify hugely expensive and unreliable energy supplements. That's the crime of the last 10 years. You always know when news come out about a wonderful new way to produce for instance jetfuel, from algae. But they never tell you the economics because it stinks. Same with photovoltaic. Why cant we have some seriously investigative journalism to expose the nonsense or fairyland economics of some of the so called solutions being touted about these days?

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I would like to welcome the IWI to the real world!!

they want everything for nothing and still complain.

now they know how the rest of NZ feel - we've been pouring money into this black hole for toooo long

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"Emissions Trading Scheme are robbing Maori of hundreds of millions of dollars by depressing the value of New Zealand carbon credits"

What of the government robbing every New Zealander of hundreds of millions of dollars with the ETS full stop!

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Carbon tax was always nothing but a scam, nothing but a poor excuse to gouge taxation to a new level.

The IWI issue, who cares, it was never legitimately there's to start with.

Standard deal, how do we get Maori into small businessess? (A) Give them a big business and just wait.......

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The silver lining is that Iwi can now convert all their forestry land into productive agricultural land at minimal cost (i.e. by purchasing cheap credits and surrendering them to the crown) and in fact benefit a whole lot more of their people with greater employment opportunities than merely farming NZU's. So why exactly are they bleating - perhaps because conversion will actually involve real work and real risk!!

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I tremember that back when the ETS first came in some IWI were wanting their Treaty claims reopened because the value of their forests had dropped because they could not now clear them. As usual, heads they win, tails we lose.

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