OECD shows the way with carbon credits

12 Apr 2007

The OECD's report on the country's environmental performance has echoed the forest industry's stance that carbon credits and liabilities should be owned by forest owners, not the government.

NZ Forest Owners Association president Peter Berg says the OECD has delivered an impressive score-card to the industry, praising it for its environmental management and endorsing its key climate change policies.

"The OECD notes that our environmental code of practice has led to information sharing and the uptake of sustainable forest management practices," he says.

"The government is also praised for the reforestation of some 320 km 2 of highly erosion-prone farmland through the East Coast Forestry Project.

"However the main thrust of the report is the failure of the government to introduce policies which ensure that environmental costs are reflected in prices."

The report points out that carbon sequestration in forests, a key factor in New Zealand's Kyoto accounting since 1990, is likely to diminish over time as planted forests reach maturity.

Government retention of forestry carbon sink credits may have contributed to the weakening of incentives to expand plantations and it recommends that government "give consideration to allocating carbon sink credits and liabilities to forest owners."

Mr Berg says the OECD and the forest industry agree that a price should be put on carbon, so that those sectors that add to the problem are penalised and those that contribute to the solution are rewarded.

In addition, the OECD wants to see measures introduced to reduce net greenhouse (GHG) emissions from land-based industries, prioritising those that also meet other environmental objectives such as flood protection and nature conservation.

"The GHG intensity of the New Zealand economy is the fourth highest in the OECD, and GHG emissions continued to grow during the review period. A domestic target for 2000, concerning reduction of CO2 emissions, was not met," the report says.

"The suspension of the climate change policy package in 2005 (including its planned carbon tax) has created great uncertainty about how New Zealand will meet its Kyoto target."

Mr Berg says the government needs to take the report seriously.

"Forestry has a huge amount to offer New Zealand economically, socially and environmentally. But it won't achieve this potential if it is continually being required to offset the environmental costs incurred by other sectors.

"Natural justice says costs should lie where they fall - with the industries that incur them. Only when the government's policies reflect this principle will we see an increase in the forest planting needed for the country to meet its Kyoto target."

Source: http://www.oecd.org/dataoecd/6/6/37915514.pdf

For more information: please contact Peter Berg, Tel 09 309 5049 or 021 421 291