Carbon Frequently Asked Questions

  • What is climate change?

    Climate change is a phrase we use to describe changing climate patterns that:

    • can be attributed to human activity that alters the earth’s atmosphere;
    • are beyond natural climate variations observed over comparable time periods.

    The effects of global warming and climate change are already measurable. New Zealand’s climate is changing, largely because of the build-up in the earth’s atmosphere of greenhouse gases particularly carbon dioxide, methane and nitrous oxide.

    The effects of climate change are seen in global warming, rise in sea levels and the increase in extreme weather events worldwide.

  • What is the ETS and how does it work?

    The ETS is a carbon market that affects all New Zealanders.  It is based on the fact that trees absorb carbon dioxide as they grow, so the more trees we plant, the more carbon dioxide will be taken out of the atmosphere.   The ETS places a value on the amount of carbon dioxide that is taken out of the atmosphere (the term that is used for this process is “sequestration”).

  • What is a carbon credit and who uses them?

    A carbon credit is the value attributed to taking one tonne of carbon dioxide out of the atmosphere.   Companies buy carbon credits to trade off against the tonnes of carbon they produce (emissions) in their businesses whether it is using carbon fuels (e.g. airlines), selling carbon fuels (petrol companies) or manufacturing processes which create emissions

    The ETS provides  a market for people who want to buy or sell carbon credits.

  • Who buys and who sells carbon credits?

    All major sectors of the economy have obligations under the New Zealand emissions trading scheme. This includes the following sectors: forestry, stationary energy (power generation), industrial processes, transport (liquid fossil fuels used on land, sea and in the air), synthetic gases, with  waste and agriculture being adopted into the ETS soon.  Under the scheme, sector participants are required to surrender one emissions unit for each tonne of greenhouse gas emissions they are responsible for producing. Some sectors receive an allocation of emission units.

    Households and small businesses are not required to participate in the emissions trading scheme but may experience indirect price increases in the cost of electricity and fuel when the stationery energy and transport sectors enter the scheme. 

  • Who does the Emissions Trading Scheme apply to?

    Every sector and every greenhouse gas in New Zealand. Everyone in New Zealand who uses electricity or fuel for a car will notice increased costs.

  • Who needs carbon credits?

    The right to pollute the atmosphere is becoming increasingly regulated internationally hence the carbon market has been developed to provide an equitable way for industry to offset their greenhouse emissions. Basically emission units (carbon credits) are traded for the right to emit CO2 into the atmosphere.

  • How are credits delivered?

    Carbon credits are claimed annually by filing an application with the New Zealand Government.

  • What is carbon storage?

    Carbon storage is simply the storage of organic matter in soil and trees that reduces the amount of carbon dioxide in the atmosphere.

  • How can planting trees assist in reducing emissions?

    Carbon dioxide is believed to be the primary greenhouse gas that is contributing to climate change. Photosynthesis is the natural process that trees and plants use to grow. This process uses carbon dioxide from the atmosphere together with sunlight in a chemical reaction to produce oxygen and glucose. It is because of photosynthesis that growing trees can help reduce the emission of greenhouse gases to the atmosphere. Carbon Sequestration is the term used to describe this process of absorbing and storing carbon.

  • How is Carbon Sequestration measured?

    It is not feasible to directly measure the amount of carbon that a forest is storing over time, so the preferred approach is to use tree-growth modelling to estimate the amount of carbon stored. This modelling is then adjusted on a regular basis to reflect the occurrence of events that affect the rate of carbon sequestration, such as rainfall or bushfire. Many different models for carbon sequestration are available.

  • So what does one tonne of carbon dioxide look like?

    If you take a typical pine tree trunk, half of it is carbon (cellulose, lignin etc). Let’s assume that the tree trunk is 2 cubic metres, therefore 1 cubic meter is carbon. It took 3.67 tonnes of carbon dioxide to make that one tonne of carbon.