10 November 2011

Mixed forestry reaction to National promises

National Party promises to adopt some of the recommendations made by the panel that reviewed the Emissions Trading Scheme (ETS) have been welcomed by forest owners. But they say much more policy work is needed if forestry is to achieve its potential for New Zealand.

Forest Owners Association chief executive David Rhodes said ‘averaging’, a way to make it easier for owners of small forests to participate in the scheme, would be a positive move. It offers an assured income during the first few years of growth of a new forest and would not require credits to be surrendered at harvest, so long as the forest was replanted.

“Forest planting is still well short of the potential that exists and well short of what New Zealand needs to meets its Kyoto obligations,” he says.

“It is clear from recent planting statistics just how important it is to get policy settings right. As soon as forest owners had clarity on the ETS rules there was investment certainty and forest planting responded.

“Policies that encourage land owner participation in the ETS do not necessarily mean additional costs for taxpayers. Like averaging, they can be designed to be self-funding.”

Mr Rhodes says the importance of forestry to New Zealand is clear from its prominence in the National Party's environment and climate change policy position paper. This extends beyond climate change to the management of soils and waterways. Wood also has an important role to play in the rebuild of Christchurch.

He says National has yet to develop clear positions on many of the review panel’s sound recommendations on how to improve the ETS. For example, how international carbon credits with low environmental credibility will be dealt with, and how carbon monitoring costs will be applied.

“We welcome the party's support from 2013 for offsetting – the replanting of a harvested forest in a new location – as this will enable land use to change in response to market signals.

“We are concerned, however, at the implication that National would consider, as a quid pro quo, revoking all the second tranche of compensation units for pre-1990 forestry. The harvesting liability imposed on pre-1990 forests is permanent and, at 5 per cent of the potential liability, total compensation is modest.

“Offsetting simply means that the liability can be transferred to another piece of land – it does not mean that the liability no longer exists If a higher and better use presents itself in the future then the new forest will again have to be shifted.

“Moreover, offsetting is a far from costless exercise, with new forest infrastructure having to be created in the new location. The review panel's intent was that compensation should be forfeited for only the areas of forest where offsetting is undertaken, not the whole estate, and this provides a reasonable compromise.”

ENDS

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