Conclusion

New Zealand has taken a progressive step in developing a national trading system for greenhouse gas emissions that includes the land-use sector. The Permanent Forest Sink Initiative (PFSI) creates a mechanism for private landowners to take advantage of carbon sequestration opportunities on their own land, quantify the social benefits of sequestration, and receive income from domestic or international carbon markets as compensation for their efforts. Private landowners will now have an economic incentive to reduce New Zealand’s net emissions by changing their land use. If the market works properly, private landowners will begin generating a pool of cost-effective carbon credits that the New Zealand government, private firms, or international buyers can utilize to meet their own commitments to reducing climate change.