On 31 May, the Climate Change Commission provided Parliament with its final advice on the New Zealand Emissions Trading Scheme before the government sets the first of three emissions budgets later this year. In this advice there was significant consideration on land use and the impacts of afforestation.

The Commission recommended the Emissions Trading Scheme be amended to manage exotic afforestation and provide assistance for local government in mitigating the local impacts of afforestation.

If the government implements the Commission's recommendation, carbon farming returns for planting exotic trees, such as Pinus, will decrease, while the carbon farming returns for planting native forest blocks will either remain constant or increase.

With a large proportion of carbon sinks across New Zealand planted in Pinus, this will have an impact on both existing forestry blocks and blocks that will be planted in the future. The Commission has instead shifted its focus to reduce gross carbon dioxide which is largely produced by burning fossil fuels.

We will watch how the Commission's recommendations progress during the year, and will provide more information as it comes to hand.

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