Speaking at the annual meeting of the NZ Farm Forestry Association in Gisborne on Tuesday, he said the government was aware that the review of the Emissions Trading Scheme (ETS) was causing great uncertainty in the forest industry.

“Forestry is in the unique position of being part of the current ETS, while a review takes place. Getting an enduring solution is a priority for me as your minister,” Mr Carter said. “That said, there is also a pressing need to review the ETS we have inherited, to ensure it meets the balance between economic needs and environmental responsibilities.

“However, one thing is clear. This government is committed to a price-based mechanism to reduce emissions and meet New Zealand's international commitments under the Kyoto Protocol. Recent figures released by climate change Minister Nick Smith show forestry is an essential part of the solution to climate change. At this stage, pending the outcome of the review, an ETS is the government's preferred option - and forestry will be part of that mechanism.”

Mr Carter said agriculture can't argue to be entirely exempted from the scheme, but he believes a combination of farming and forestry offers the chance for farmers to counter their own emissions.

“Many of you may know me as a farmer, but I want to assure you that agriculture won't be placed ahead of forestry or biosecurity under my leadership. Forestry is a priority for me as your minister,” he said.

“As a farmer myself I firmly believe that farming and forestry make the perfect fit and I believe we need to see more partnerships between farming and forestry.

“I believe if sustainable land use in terms of partnering agriculture and forestry is ever to be anything more than just a catch-phrase, then land owners need to have a better understanding of the multiple benefits of forestry.”

Mr Carter said forestry has a critical role to play in land management given its ability to reduce flood impacts, improve water quality and management. On the farm it also provides shade and shelter for stock welfare, enhancing aesthetics, encouraging biodiversity and providing an income.

Besides the ETS, the government is offering two carbon-credit schemes to choose from; the Afforestation Grant Scheme and the Permanent Forest Sink Initiative.

The Afforestation Grant Scheme is designed to encourage greater levels of greenhouse gas absorption by increasing the area of new, Kyoto compliant forest in New Zealand. Participants own the new forests and after 10 years can earn income from the timber and, unless the forest owner joins the Emissions Trading Scheme, deforestation can occur without any liabilities.

Mr Carter said the Permanent Forest Sink Initiative may be an attractive alternative to the ETS, especially for those who want to plant land with trees to create a forest where there is no intention of clear-felling. This scheme could be an ideal opportunity for someone who wants to plant slower growing trees including indigenous species; something he believes has great appeal and potential for farm foresters.

He concluded with a list of opportunities within the forestry sector that would help in lifting New Zealand out of the recession and further drive the economy:

• Improving productivity throughout the value chain, thereby improving profitability
• Attracting new investment in forest growing and wood processing
• Developing new markets and increasing New Zealand's share in existing markets
• Ensuring forestry and wood processing are attractive career options, especially for young people
• Opportunities to differentiate New Zealand products so we don't compete solely on price
• High tech sawmills with greater scale where the resource enables this
• Spreading risk through incorporating carbon farming opportunities into the business
• Greater efficiencies in transportation (logistics and logging truck configurations)
• Small scale forest owners looking to collectively maximise the value of their resource.

Source: Edited version NZ Government speech