27 February 2007

NZ FOREST OWNERS ASSOCIATION
MEDIA RELEASE
IMMEDIATE

Shrinking forests a result of unfair policies

The government must adopt policies which are fair to forest owners if it wants to solve its climate change policy nightmare says Forest Owners Association president Peter Berg. He was responding to the release of figures showing that the area in planted forest fell by about 8000 hectares last year.
"Forestry minister Jim Anderton says the lack of new planting and the dramatic increase in deforestation is evidence of the need for the government to urgently implement a forestry policy.

"We agree," said Mr Berg, "however what we consider good forestry policy and what government is advocating are still miles apart.
The reason our forests are shrinking is because of the unfair policies the government is promoting."
Mr Berg says forestry is the one industry which can relatively quickly and cost-effectively change New Zealand's greenhouse gas profile for the better.

"We need more trees to offset increased greenhouse gas emissions from farming, industry and transport. The best way to achieve that is to reward those who are growing the trees which store the carbon and to impose a cost on those who are creating the emissions.

"Instead, the government has decided it will penalise a large group of forest owners with a land-use change tax. It has always been a feature of the NZ economy that we have been prepared to change land use if better or new economic opportunities have arisen - kiwifruit being an obvious example.

"Now government is apparently saying keep your trees, and trying to lock in this land-use for ever. Can you really blame foresters for wanting to get in early and harvest parts of their forests better suited to other land uses now?

"They can't understand why they are being singled out for potentially debilitating taxes, when the real emitters are getting a free ride."

He says forest owners see the tax and the proposal to nationalise the carbon crop in Kyoto forests as being so unfair that some are clearing immature forests where the deforestation tax may not even apply.

"It is particularly galling that at a time when export prices for forest owners are the highest for many years, and you would normally be expecting a huge surge in forest investor confidence, negative policy proposals are continuing to discourage interest in tree planting.

"Unfair policies like this do immense damage to our forest industry and impose a huge cost on the taxpayer. Who is going to invest in forestry if there's a precedent for the government to nationalise the future carbon crop and to lock land users into trees, even in uneconomic and unsuitable situations?"

Mr Berg reiterates his call for cross-party support for the six-point climate change plan released by the forest industry last year.
Forest owners want the government to:

* Remove the inequitable, retrospective 'deforestation cap'.

* Allow land owners with Kyoto-qualifying forests (forests planted from 1990) to financially benefit from the value of the carbon their forests remove from the atmosphere from 2008 onwards.

* Introduce broad-based carbon charges, ensuring that all emitters of greenhouse gases face the same opportunity costs.

* Ensure that New Zealand's Kyoto policies have the best long-term outcomes for New Zealand, even if they don't exactly mirror current Kyoto rules.

* Develop a regime which puts a value on the environmental attributes of forestry, thereby encouraging investment in the sector.

* Act immediately.

[ends]

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