“The compensation offered by government will help cushion the blow of having their land locked into forestry in perpetuity, but is only a fraction of the liability being carried and is insufficient to encourage the increase in planting that the economy and the environment needs.”

He says the ETS as it stands is not expected to stimulate the new planting the economy and the environment need.

To make the NZ scheme truly positive, forest planting needs to be an attractive proposition for land owners, especially those with experience and investment in the sector. By way of contrast, the Australian ETS does not impose any tax on pre-1990 forest owners, Mr Rhodes says.

“To make carbon trading attractive, forest owners need a market where there are people actively buying carbon credits. But this won’t happen, because transport and agriculture won’t have much incentive to reduce their emissions for several years.

“The quality of the market will also be weakened by the intention to allow Russian ‘hot air’ credits to participate in the NZ scheme whereas the Australian ETS will not permit it.”

Mr Rhodes says forest owners need certainty, and need it soon, because of the risk of missing yet another planting season.

“Forestry is the only sector that can assist New Zealand to achieve its Kyoto obligations at no cost to the tax payer. But for that to happen we need land owners to have an incentive to plant trees.”

[ends]

For more information, please contact David Rhodes, tel 0274 955 525