Changes to Kyoto scheme "last straw"

7 May 2008

Nz Forest Owners Association

Changes to Kyoto scheme "last straw" for forest owners

Recent changes to the government's emission trading scheme mean forestry will be the only sector in the NZ economy meeting its Kyoto obligations until 2011.

"Owners of forests planted before 1990 are already facing grossly unfair Kyoto taxes of $40,000 a hectare or more if they change land use. The value of their forest land has fallen through the floor as a result.

"To be told that other sectors are to have further delays to their entry into the scheme is the final straw for many of them," says NZFOA climate change spokesperson Peter Clark.

"New Zealand needs to plant a lot more trees now if it wants to meet its obligations in Kyoto commitment period 2. But there is no way that's going to happen under government policies as they stand."

He points to Treasury advice to the government that forestry and farming should have been brought into an emission trading scheme that was already operating. He says that's the policy in Europe, where emission trading started with industry and has yet to include forestry.

"You need to have buyers and sellers of emission units if a trading scheme is to work. You also need farming and forestry to come into the scheme at the same time, so that those planting trees to offset emissions can compete fairly for land with those industries which generate those emissions."

Mr Clark says the government claimed to have based its Kyoto policies on least cost, equity between sectors and environmental integrity. "The policies that have been rolled out to date make a mockery of those principles.

"The main emitting industries are not having to reduce their emissions for periods which are constantly being extended. Meanwhile new planting for forestry * the one positive thing that can be done now * has been effectively shut down by punitive and inflexible policies that lack all environmental integrity."

He says logic and equity suggest that pre-1990 forest owners should be properly compensated for not being able to convert land to other uses and be allowed to offset. In other words, they should be allowed to replant trees following harvest in a different location.

At the same time, owners of post-1989 forests must be able to claim for carbon sequestered through all five years of Kyoto's first commitment period (2008 to 2012). To do this, they need to be able to register qualifying afforestation projects this year and be entitled to sell into international carbon markets as per the current ETS timetable and design.

The income they derive from this will help encourage the afforestation needed to ensure sustainable land use.

"As for all emitters in the NZ economy, the best compromise would be to transition emissions from all sectors into the scheme at the same time * with obligations imposed on all emitters no later than 2011. That would give everyone time to adjust and ensure there was a basis for a viable market for NZ emission units from day one.

"At the same time, the slippage we are seeing with target dates for politically sensitive sectors cannot keep happening.

"New Zealand's reputation as a clean and green producer of food and fibre is inextricably linked to its response to climate change. "If we are a leader, this reputation is enhanced. If we are a follower we run the risk of losing that reputation and at worst, having to face barriers to trade with those countries which have had the political strength to face up to their responsibilities."

ENDS

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