No Hope Of Tree Planting After Government’s “Cap”

MEDIA STATEMENT

Sunday 16 August 2009

For Immediate Release

No Hope Of Tree Planting After Government’s “Cap” Announcement

There will be no private investment in new forest planting for the foreseeable future following Radio New Zealand’s revelation today that the Government plans to introduce a carbon price cap and a ban on international trade of carbon credits, the Kyoto Forestry Association (KFA) said today.

KFA spokesman, Roger Dickie, said the new policy made a mockery of the National Party’s pledge, in its 2008 forestry policy, to see 600,000 to 800,000 hectares of eroding land planted with new forests. (see http://www.national.org.nz/files/2008/forestry.pdf )

“There will be no private investment in new forest planting under this anti-free-enterprise policy signalled by the Government through Radio New Zealand,” Mr Dickie said. “New planting statistics for 2009 and 2010 are sure to be the lowest ever.”

Mr Dickie said the policy was particularly perverse given the Government had made it clear that its recently announced emissions reduction targets of 10% to 20% are dependent on significant new areas of forestry being planted.

“Today’s developments will have exactly the opposite effect,” Mr Dickie said.

The KFA represents the more than 30,000 ordinary New Zealanders and forestry companies who risked more than $100 million per annum of their own capital to invest in 250,000 ha of New Zealand’s 570,000 ha Kyoto forestry estate.

KFA spokesman Roger Dickie said it was likely that one million hectares of new forestry would be required to take New Zealand close to the 10% to 20% emission reduction target but the association was unaware of plans to plant any significant areas of new forest.

“This is a tragedy for New Zealand and the industry because past records have proved that private investment could easily achieve this target,” he said.

“The delays in implementation of the ETS, after nearly a decade of u-turns, and the uncertainty caused by the Select Committee review have all contributed to a total collapse in investor confidence which may take a generation to reverse,” Mr Dickie said.

The Government’s announcement today that it plans to cap carbon prices and ban international trade will guarantee that forest investors will avoid the industry and the much needed forest plantings will not happen.

Mr Dickie said it seems that Government wants the forest industry to receive artificially low carbon returns and in doing so will force the industry to subsidise the emitting power generators and oil companies.

With such a draconian policy envisaged, forest investors will simply vote with their feet and stay out of the industry, he said.

Mr Dickie said that continuing government interference with forestry has seen new planting fall from an average of 65,000 ha per year for an eight year period in the 1990s to less than 2,000 ha per year for the last five years.

“New Zealand’s tree nursery infrastructure is seriously run down, most have simply shut down, as well the entire labour pool required for new forest planting will need to be trained and reintroduced to the industry.

“Forestry investors and everyone else required to get planting underway again are not going to respond to controlled market prices and continuing government interference with the industry. The industry needs assurances that policy will be durable for ten election cycles or more,” he said.

Mr Dickie said the prospect of a ban on international trading was in direct contradiction to the statement made by New Zealand’s Ambassador for Climate Change—Dr Adrian Macey at the United Nations Climate Change negotiating session just last week in Bonn, Germany.

Dr Macey said “New Zealand is prepared to take on a responsibility target for greenhouse gas emissions reductions of between 10 per cent and 20 per cent below 1990 levels by 2020, if there is a comprehensive global agreement. This means there is full recourse to a broad and efficient international carbon market.” http://www.mfe.govt.nz/issues/climate/emissions-target-2020/statement-nz-ambassador.html

Mr Dickie said “No forestry investor will want to plant for carbon credits if a temporary cap is in place on the price for which they can sell their credits, but then they face uncapped liabilities when they harvest,” he said.

“Forestry investors stand willing and able to deliver the Government’s bold 10% to 20% emissions-reduction goal by planting new forests but we require an equally bold ETS with assurances that, this time, government promises can be relied upon for the life cycle of a plantation forest.”

ENDS

BACKGROUND INFORMATION
The Kyoto Forestry Association represents more than 30,000 New Zealanders and forestry companies who have invested in forestry in New Zealand. KFA members invested in excess of $100 million per annum throughout the 90’s into their forests with the expectation of dual income from carbon credit sales and wood harvesting.
KFA members own more than 250,000 ha of the 570,000 ha Kyoto forest estate. This is forestry that was planted from 1990 onwards on land that was before this time planted in pasture.
“Getting tree planting underway again is the most important contribution New Zealand can make to reducing the world’s net carbon emissions and to reduce New Zealand’s Kyoto deficit. There is urgent need for government to re-create the investor confidence to drive new planting, as getting trees in the ground will hugely benefit New Zealand's carbon accounts in Kyoto’s post 2012 era, all at nil cost to the taxpayer,” Mr Dickie said.

Information about forest carbon sequestration from our media release of 12th August is also relevant for background information and is enclosed below.

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