Emission Trading System and Forest: Learning from the Experience of New Zealand Chapter uri icon


  • In the area of international policy to mitigate climate change, the forest has been important in achieving the objectives of liable countries. The Emissions Trading System in New Zealand (NZ ETS) is the only case of an ETS integrating forestry as a mandatory actor. This is the result of prolonged political discussions and the characteristics of New Zealand forestry. Forest landowners are liable to surrender allowances for deforestation and can potentially receive allowances for the level of carbon sequestered. This scheme created new opportunities for forestry activities and impacted the decision-making trade-offs related to land-use changes. In Mexico, the implementation of an Emissions Trading System in 2020 is evidence of the country’s commitment to controlling domestic emissions under the Paris Agreement. Nevertheless, for now, the forestry sector is not involved as a liable actor. It is possible to envision the integration of the forest sector because of the extensive forest cover in the country, which provides a livelihood for a large part of the population. Mexico has the experience and institutional framework to integrate forestry into national emission accounting and carbon forest projects in the voluntary market. The potential impacts of this integration are both positive and negative. Environmental impacts are positive because forest areas can help mitigate emissions, but intensive carbon farming disrupts native forests and biodiversity. The economic impacts would be highly favorable for forest landowners if market volatility were controlled, but there is a potential loss of public revenue for the State. Finally, carbon forestry has the potential to cause conflict between economic sectors involved in land use and among participating communities. © 2022, The Author(s).

publication date

  • 2022-01-01