The main elements of the deal include a government minimum price guarantee of $25 a tonne for new production forests, an expansion of the Afforestation Grants Scheme and the Permanent Forest Sink Initiative.

But Forest Owners' Association president Peter Berg says the move would encourage too much interference from the government and his group would not welcome it.

"If you are going to underwrite prices," he told Radio New Zealand, "then of course the corollary of that almost certainly is that government would also want to cap prices.

"We've taken the view that the market will set the price and that that provides the best possible incentive for people to change their habits."

Mr Berg says the proposal also lacks information about how it might affect the wood-processing industry.

Green Party co-leader Russel Norman says 50,000 job-years will be created by the deal, and 34 million tonnes of carbon will be stored. The party estimates the plan will require less than $500 million in government investment over the next 10 years in forestry, pest control and wilding pine removal.

“We have 150,000 Kiwis out of work and the world desperately needs to reduce its carbon emissions. There’s a bold Green New Deal response that can tackle both of these problems at the same time if our government has the courage to act,” he said when releasing the report.

“We can put thousands of New Zealanders to work over the next decade building a sustainable economy, and the government would see a return on that investment over time.” The release of the 40-page report was more evidence of the Green Party’s renewed commitment to talking on economic issues, Dr Norman said.

In May, the Greens released their first stimulus package as a response to the global financial crisis, and Green MPs held town hall meetings around the country to share the economic approach with interested New Zealanders. The $323 million insulation funding agreed with the Government was part of that package.

A plan illustrating how New Zealand could take practical steps towards a low-carbon economy followed in August, demonstrating how the country could significantly reduce its emissions at little cost.

“This Green New Deal plan has a rural focus,” said Dr Norman. “Unemployment is particularly bad in places like Gisborne/Hawke’s Bay and investment in forestry and pest control would be a great boost to their rural economies.”

The latest Green New Deal package recommends investment and regulatory changes in the forestry industry that would create more than 36,000 job years over the next ten years while developing and diversifying New Zealand’s timber resources and expanding permanent carbon forests. Additional environmental benefits include flood and erosion control as well as improved water quality.

Enhanced ground-based pest control and stepped-up efforts to rid the high country of wilding conifers would generate a further 12,000 job years while protecting forests and related natural assets. It would also boost the fur industry and help protect hydro lake water levels.

Dr Norman said the National-led Government seemed short on new ideas and reluctant to take decisive action, “John Key’s government has been slow to grasp the fact that the economy depends on the environment and we need ways to look after both. Mining our National Parks isn’t a good answer. Neither is the Government’s focus on cutting benefits rather than creating jobs.”

The Green Party proposals says forest planting needs to occur now in order to help smooth the anticipated spike in deforestation emissions due in the early 2020s and beyond.

“There is an opportunity for government to intervene at very low cost to create jobs and the forest planting we need, without interfering with the operation of the market, or subsidising the cost of planting. This could be achieved by providing a floor price for the value of carbon for new planting, charging a very modest premium to foresters for this security.”

The government’s underwriting of the value of carbon would take the form of a contingent liability on the government’s books, with the administration of the scheme being covered by the premiums charged to foresters. This is not insurance for the carbon stocks themselves, but simply a guarantee that the carbon contained in the participating forests would have a floor value of $25 per tonne.

Foresters would continue to bear (and mitigate) the technical and market risks they currently do, such as fire, wind-strike and log prices. By offering to underwrite only the floor price of new plantings and charging a modest premium, the government would avoid the hazards inherent in other subsidy schemes.

The scheme would only be offered to new, post-1989 plantings, not rotation plantings. Any land use change, failure to pay premiums, or loss of the forest would exclude it from the scheme. The underwriting programme would be on offer for 10 years and then be subject to review.

It is anticipated that as the international and domestic carbon market matures, foresters would opt out of the premiums, winding up the scheme even before a rotation matures. At this point the programme is intended to work only as an incentive for commercial carbon forestry, but serious consideration should be given to including planting under other government schemes, such as the Permanent Forest Sinks Initiative or joint venture planting on Crown land. The premiums charged would be used to administer the scheme.

The Green New Deal report is here.