Forestry Alone Could Bridge Kyoto Deficit

Tuesday 7 March 2006

Forestry Alone Could Bridge Kyoto Deficit, New Data Shows

Simply restoring new tree plantings to the levels achieved consistently through the 1990s could alone be enough to bridge New Zealand’s worsening Kyoto deficit, the Kyoto Forestry Association (KFA) said today, on the eve of the Forest Industries International Exhibition and Conference in Rotorua, the industry’s leading annual event.

“If plantings returned to the 65,000 hectares per annum achieved in the 1990s, New Zealand could earn an additional half billion dollars in carbon credits during the first commitment period of the Kyoto Protocol alone,” KFA spokesman Roger Dickie said. “The gain over the first and second commitment periods could approach NZ$2 billion.”

Mr Dickie said this alone would bridge New Zealand’s Kyoto deficit – meaning that New Zealand would not only be making money from Kyoto, but would be meeting its international obligations under the Protocol to combat climate change.

“The new calculations indicate that the previous National Government was right to sign Kyoto and the Labour-led Government was right to ratify it – but that poor climate change and forestry policy since then has let the side down,” Mr Dickie said.

”More importantly, looking ahead, the calculations show it is not too late to make policy changes that will make New Zealand an economic and environmental winner from Kyoto – but only if those changes inspire confidence amongst forestry investors that their investments are safe from expropriation by Government. That requires the Government to recognise forest owners’ property rights in Kyoto carbon credits going back to 1990.”

The KFA’s calculations are based on work by New Zealand’s leading forestry consultant, Piers Maclaren & Associates Ltd and confirmed by experts at one of New Zealand’s leading plantation forestry companies, P F Olsen & Company Ltd.

With new forestry plantings of 65,000 hectares per year, the level achieved in the 1990s, the consultants estimate that a total of 182 million tonnes of the greenhouse gas CO2 would be absorbed by forestry through the first commitment period of the Kyoto Protocol (2009-2013). This compares with just 160 million tonnes under the current situation of no new plantings – a difference of 22 million tonnes in just the first commitment period.

Based on an international carbon price of NZ$15 per tonne of CO2, this additional carbon absorption would generate $330 million extra in carbon credits for New Zealand. At the more likely carbon price of NZ$25 per tonne of CO2, the new plantings would generate NZ$550 million for New Zealand – enough to balance New Zealand’s Kyoto books.

The analysis shows the gains for New Zealand in the second commitment period (2014-2018) would be at least twice as great, with New Zealand standing to gain a further NZ$1.35 billion in the second commitment period, based on a carbon price of NZ$25 per tonne of CO2, so that the total gain over the next 12 years would approach NZ$2 billion.

“The new calculations are very good news for New Zealand and for Government Ministers, who have had the Kyoto mess dumped on them by officials,” Mr Dickie said.

“Getting policy right relies on Ministers understanding that those most likely to invest in new forestry in the future are those who have invested in forestry in the past. That means that the most important thing Ministers can do to restore confidence in the forestry industry is to ensure that the property rights promised to those who planted trees in the 1990s are respected. Were Ministers to make such a commitment, confidence would begin to return overnight – to the benefit of our industry, our economy and our environment.”

ENDS

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