UF climate policy needs more work

18 Apr 2007

The Forest Owners Association is heartened by some elements in the United Future's climate change policies and plans to have further discussions with the party.

United Future clearly recognises the vital role that forestry will play if New Zealand is to meet its climate change obligations," says NZFOA president Peter Berg. "But its policies need more work."

He says forest owners will be pleased that United Future has retained an open mind about the ownership of carbon credits in existing Kyoto forests.

"Mr Copeland says the issue needs further study and will welcome further submissions from the industry. We hope to have discussions with him shortly."

Mr Berg says it is essential that owners of existing Kyoto forests derive an income from the carbon they are storing for the nation.

"Their forests will store an estimated $2+ billion worth of carbon over the period 2008 –2012. It is a very large sum of money, but in the process of considering how it should be used political parties must not overlook those who invested the hundreds of millions of dollars and used hundreds of thousands of hectares of their land to create it.

"This is an issue of fairness and investor confidence which has been recognised by the OECD, National, the Greens, the Maori Party and ACT.

"United Future proposes that forest owners should be granted carbon credits and liabilities, or given the choice of an afforestation grant. This choice mirrors government policy, and is useful, but fairness dictates that it should apply from 1990, not from 2007."

Mr Berg says the proposal to have a deforestation tax which applies only to those with forests larger than 500 hectares will be welcomed by many forest owners but unfairly discriminates against the larger operators who continue to make a huge contribution to the industry.

"If Kyoto forest owners are devolved credits, and competing land users are required to offset their increased emissions there will be no need for a deforestation tax anyway. Everyone will be planting trees."

He says the proposal by United Future to allow owners of non-Kyoto forest to replant a harvested forest on a more suitable site is a big improvement on Labour's proposals which effectively keep forests on existing sites indefinitely.

Mr Berg says some other elements in the United Future policy package will also find favour with forest owners.

"Their acceptance that a price urgently needs to be put on carbon, so there are incentives across the economy to plant trees and reduce emissions, reflects a growing consensus of informed opinion.

"We would support their proposal to include of wood products, as a carbon reservoir, in Kyoto accounting.

"We are also pleased to see that United Future understands income tax issues relating to forestry. Their proposals in this area will improve the ease of buying and selling immature forests without creating market distortions."

Mr Berg says from 2008 carbon will have a very real cost to New Zealand which will have to be carried by the taxpayer. To minimise this cost, those sectors that increase carbon outputs should have to pay for their emissions, and those who reduce carbon outputs should benefit.

"If we fail to take sufficient action within New Zealand to curb emissions the danger is that other countries will do it for us — food miles is the start of this."

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