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Support an ETS that works, say forest owners

24 August 2008

Support an ETS that works, say forest owners

The NZ Forest Owners Association is calling on the Greens and NZ First to support an emissions trading scheme (ETS) that includes all sectors and all gases much earlier than is currently envisaged.
Whatever form the scheme takes, it needs from day one to send appropriate signals to emitters to either reduce emissions, or increase absorption of greenhouse gases, says chief executive David Rhodes.  The government’s proposed ETS does not send strong enough signals where they are needed, he says.
“Like the Green Party, we support some elements of the current ETS. For example, it is positive that post-1989 forest owners have the option of participating in emission trading. However, many will not do so because of the carbon price risks and because there are now too few parties in the ETS for them to trade with.
“In contrast, the treatment of those who were unfortunate to have planted forests before 1990 has badly shaken industry confidence. They are the only sector in the economy that is liable for 100 per cent of its emissions from the start of the scheme.  Also, they cannot replant on a better site after harvest without paying massive penalties.
“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.
“Owners of pre-1990 forests are in the invidious position of having to carry all the costs – which are potentially very substantial – of storing carbon for the country but are unable to capture any of the benefits.”
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. The Australian ETS does not tax pre-1990 forest owners for relocating forests following harvest – nor should ours,” 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.
“Allowing trading in Russian ‘hot air’ credits, as is envisaged in the Australian ETS would help create a vibrant carbon market but, once again, this is not permitted under the New Zealand ETS.”
He says that forest owners agree with the Greens that the New Zealand taxpayer is being required to shoulder too large a share of agricultural and transport emissions. 
“Sure, agriculture’s obligations should be phased in because of its importance to the economy and the technological challenges involved in reducing methane emissions from ruminants. Nevertheless there is action the sector can undertake to significantly reduce pasture emissions now.”
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.”

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