Post-1989 Forest Owners Worried About ETS Delay

MEDIA STATEMENT

Tuesday 6 May 2008

FOR IMMEDIATE RELEASE

Post-1989 Forest Owners Worried About ETS Delay

The Kyoto Forestry Association (KFA) is concerned about reports the Government plans delaying bringing other industries, notably transport, into the Emissions Trading Scheme (ETS).

It says this risks significantly devaluing the carbon credits, now known as New Zealand Units (NZUs), that post-1989 forest owners have been earning since 1 January 2008 under the Government’s Climate Change (Emissions Trading and Renewable Preference) Bill, which is currently being considered by the Finance & Expenditure Select Committee but yet to be passed by Parliament.

From 2003 to 2007, KFA ran a high-profile campaign for the carbon credits which led to the announcement by Forestry Minister Jim Anderton in September 2007 that the Labour/Progressive Government had agreed that NZUs would be earned by those who planted trees since 1 January 1990 and by those who plant new forests in the future.

“If other sectors aren’t brought into the Emissions Trading Scheme under the agreed timetable, then those who sequester greenhouse gases may have no one to sell credits to and that would seriously devalue them,” KFA spokesman Roger Dickie said today.

“That would act as a major disincentive to investors planning to plant new forests in 2008 and beyond, which is counter to the Government’s intention of increasing forest cover in New Zealand. In fact, this change in position would guarantee that no new planting will take place in 2008/9. Unless we start planting forests then not only will the forestry industry continue to remain in a state of suspension but New Zealand will be forced to buy the vast majority of its credits offshore.”

Mr Dickie said that the Government and KFA had worked in good faith to resolve their differences last year, leading to the Government’s September 2007 announcement. He said that had given forest owners assurance about the integrity of the next round of consultation and the Select Committee process.

“It would be unfortunate if the Government now made unilateral changes to the ETS without considering their economic impact on post-1989 forest owners and new investors coming into the industry,” he said.

KFA is monitoring the situation closely and hopes for more information in the next few days.

ENDS

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