"Plantation forests offer one of the best opportunities for New Zealand to meet its greenhouse gas targets with least disruption to our standard of living and to the health of the economy," says NZ Forest Owners Association president Peter Berg.

"But that opportunity is being missed because of the way the government's Kyoto policies deal with forestry. They are totally divorced from commercial reality."

He says the forest industry doesn't question the need to reduce greenhouse gas emissions. Its argument is with the policies adopted by government to deal with the problem.

"For several years we have been saying the government's climate change policies, as they relate to forestry, are seriously flawed. It was inevitable, especially at a time of poor log prices, that they would lead to a decline in new plantings and higher deforestation."

Mr Berg says the serious deterioration in New Zealand's carbon balance, acknowledged yesterday by climate change minister Pete Hodgson, should be seen as a opportunity for a re-think.

"The emissions blow-out is potentially one of the most biggest financial disasters in New Zealand history. It's larger than the Air New Zealand bail-out, and up there with the big corporate crashes of the 1980s."

However, he says the situation is not irreversible. With the right policies — which forest owners believe must inevitably include financial incentives for forest owners to increase plantings — New Zealand can get back on track.

But Mr Berg says that if the government keeps going down the deforestation penalty path, and continues to treat privately-owned forests as if they were Crown chattels, the blow-out will only get bigger.

His association is keen to restart talks with minister Hodgson, in the hope that forestry can play its important part in helping the country meet its greenhouse gas emission targets. New Zealand, he says, needs to have a sound and robust strategy to address these issues, just as they have in Australia.

"However, the minister has declined to talk and has made it clear his Kyoto policies are set in stone.

"By nationalising the carbon soaked up by our commercial forests, the government is not only discouraging people from investing in the industry, it is actively encouraging them to cut them down and convert to other land uses.

"The effect of this approach, which is based on avery limited appreciation of the opportunity offered by forestry, is now plain to see. We are experiencing the lowest rate of new forest plantings for years, and possibly since tree planting first began in New Zealand more than 100 years ago.

"We hope that even at this late hour, the minister will adopt a more positive and conciliatory approach to the industry's request for a constructive dialogue. Not to do so will inevitably see even greater uncertainty and more deforestation to the detriment of all New Zealanders."

For more information, please contact Peter Berg, tel 021 421 291