Media Statement - Kyoto Forest Owners Association
19th May 2004
Issued by Kyoto Forest Owners Association (KFOA) in response to the proposed Forestry Industry Partnership announced by the Government today.
The KFOA represents tens of thousands of New Zealanders who own 50% of our post 1989 Forests. Only post 1989 forests will earn carbon credits under the Kyoto Protocol.
The government is proposing to continue with its policy to nationalise (steal) the carbon credits of post 1989 New Zealand forest growers. The quantum of this theft is estimated by government to be $5,000 per hectare for every ha of post 1989 forest for the period 2008 and 2012. A total value of NZ $2.62 billion.
The governments proposals announced today are patently unfair, anti the environment and will result in diminished planting of new forestry as well as reduced overseas investment in our forest industry. Less than 1% of the package will flow back to post 1989 forest investors.
Approximately 82% of the package is the $125 million per year allowed for the deforestation of pre 1990 forests (These are not the forests that earn carbon credits). This money will allow pre 1990 forests that exist now as carbon sinks to be converted to other land uses. It is highly likely this will be to dairying. Dairy cows produce methane which makes a significant contribution to global warming as well dairy farming allows for nitrogen, effluent and other nutrients to infiltrate ground water supplies.
Planting of new areas of forestry is essential if New Zealand is to honor its commitments to the Kyoto Protocol.
Planting of forestry is dependent on the forecast profitability of the investment. By proposing to steal the private property rights of potential forestry investors the government has reduced the Internal Rate of Return from forest investment by at least 1.5% (government’s estimate). This is equivalent to removing $6.8 million or 43% from the return of a typical investment forest.
The government’s actions have obliterated investment in new forestry planting. The governments actions are penalising investors who have demonstrated their commitment to a cleaner, greener environment.
Fair-minded New Zealanders will be appalled to see that the government has absolutely no regard to investors private property rights. A KFOA spokesman said the credits being stolen would have a value of around $50,000 over a five-year period for a typical forestry partnership investor.