Forest owners: iwi deal an opportunity lost

FOREST OWNERS ASSOCIATION
MEDIA RELEASE
23 November 2009    
 

Forest owners: iwi deal an opportunity lost

 
Forest owners say pre-1990 forests are likely to be worth next to nothing because of the ETS. Owners have been landed with the massive liabilities of being part of the scheme, but can’t earn carbon credits.
 
“Compensating iwi by giving them access to DoC land to plant forests for carbon and wood recognises this fact, but iwi are the only ones getting this special compensation. It’s unjust, as well as being an opportunity lost,” says Peter Berg, president of the Forest Owners Association.
 
“The compensation will cost taxpayers hundreds of millions of dollars in real and opportunity costs. It will cost far more than the package the industry has been asking for: the right to offset these forests; to plant them somewhere else after harvest.”
 
He says that offsetting, if it was adopted before it was provided for in an international climate change agreement, would result in the government paying for the emissions resulting from deforestation on existing sites. But the government would get this money back as the offset forests grew on their new sites.
 
“Providing offsetting would be a win all round. It would provide a badly needed confidence boost for the forest industry and the long-run cost to the taxpayer would be small. Indeed, if the offset plantings were designed to maximise carbon storage, the government could actually make a profit on the transaction.
 
“Instead, the government has chosen to give one sector of the industry free access to DoC land for planting and full ownership rights of the carbon and wood produced.”
 
Mr Berg says it is important to recognise that iwi who didn’t get their forests as part of a treaty settlement won’t benefit from the deal. They are in the same boat as other pre-1990 owners.
 
“The only positive the industry can take from the deal is that the government has recognised the very real valuation issues relating to pre-1990 forests.
 
“None of these forests have been sold since the detail of the ETS became clear. But if, as the experts expect, they have zero or very low value this is going to have huge effects on the balance sheets of many forestry companies. It is also going to create major issues for local bodies in forestry areas, when a major chunk of their rating base evaporates.”
 
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