Kyoto Forestry Association Media Statement

Sunday 24 August 2008

Kyoto Forest Owners Need ETS Passed

The thousands of New Zealanders who invested their own savings to plant trees in the 1990s need the Emissions Trading Scheme (ETS) legislation to be passed in order to secure the estimated $1.6 billion of carbon credits promised to them by all parties in Parliament, the Kyoto Forestry Association (KFA) has told the Green Party today.

KFA was responding to the Green Party's call for public input to help it decide whether or not to support the ETS Bill.

KFA spokesman Roger Dickie said KFA agreed with the Greens that there were serious flaws in the Bill but that the provisions for post-1989 forestry would provide new confidence and investment to plant new forests.

"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 billion-dollar Kyoto deficit. There is an urgent need for government to recreate 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.

Earlier entry of agriculture and improvements to the treatment of pre-1990 forest owners would also help to generate investment in new planting, he said.

"We fought a hard fight for the carbon credits which had been promised to us by successive governments in the 1990s through to 2002, and every party in Parliament, starting with National, ACT, the Greens and the Maori Party, progressively came in behind us through 2007, leading to Forestry Minister Jim Anderton's promise in September last year that the estimated $1.6 billion in carbon credits would be returned to us.

"All political parties in Parliament need to understand that the mum and dad investors that we represent will not react kindly to a failure to deliver us the carbon credits we have been promised or any tinkering with the ETS that has the effect of reducing the value of those credits. We accept that some credits need to be grand-parented to trade-exposed exporters and energy-intensive manufacturers, but anything less than an 'all sectors and all gases' ETS is unacceptable.

"We are well funded, highly motivated and there are hundreds of millions of dollars at stake. Our members do not see this as a game, where our wealth can be destroyed as a result of political gamesmanship in Wellington on the eve of an election."

Mr Dickie said KFA had sought assurances last month from the Labour and National parties that their 2007 promises to post-1989 forest owners could be relied upon, but there had been no response from either major party, alarming the sector.

"We were already concerned that the value promised to us was being eroded as a result of the decision to delay bringing transport into the ETS. We now fear that it may be further eroded through the current negotiations and put entirely at risk if the Bill is not passed in the next few weeks," Mr Dickie said.

"If Parliament cannot deliver the value to post-1989 forest owners that was promised to us, through the speedy passage of the ETS legislation, then we will want to talk to Ministers and the Opposition about other ways the promised value can be delivered to our members.

"In the meantime foresters and investors will not begin new plantings of forests while future policy is undecided. We anticipate that new plantings in 2008 will be the lowest on record for New Zealand, and we are advised that tree nurseries have received very few orders for seedlings."

In 2006/7, KFA ran a high-profile campaign for the post-1989 carbon credits to be returned to their rightful owners, those who risked their savings to plant trees since 1 January 1990.

This led, on 9 March 2007, to National Party Leader John Key announcing his party's policy that "forest owners should get a proportion of the carbon credits they have accrued since 1990, and which the government has so far refused to pay them".

Mr Key was followed, on 20 September 2007, by Forestry Minister Jim Anderton announcing on behalf of the Labour-led Government: "From next year, owners of forests planted after 1989 will be eligible for 100 per cent of the carbon credits and liabilities generated under the Emissions Trading Scheme. This is a world first. Depending on the price of carbon, this is likely to be worth at least several hundred million dollars to the forestry sector."

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