KFA Congratulates M-Co, Trade Me And Meridian
Tuesday 4 September
FOR IMMEDIATE RELEASE
KFA Congratulates M-Co, Trade Me And Meridian Energy On Establishing Carbon Market Platform
The Kyoto Forestry Association (KFA) today welcomed moves from M-Co, Trade Me and Meridian Energy to establish a platform for carbon trading within New Zealand.
KFA spokesman Roger Dickie said the carbon emissions units registry, ‘Regi’, and the Trade Me auction site, would provide a useful platform to enable forest owners to trade their carbon credits and was an important step in developing market mechanisms to fight climate change.
“We look forward to joining Meridian Energy as a provider of carbon credits on platforms such as the one announced today by M-Co and Trade Me, once the $1.25 billion worth of carbon credits that have been stolen from us by the Government are returned.”
Kyoto carbon credits were initially promised to forest owners during the 1990s but later confiscated by the Government in 2002.
Mr Dickie said he was expecting the carbon credits to be returned to forest owners, either in the Government’s revised climate change policies which he was expecting to be released within the next few weeks, or by a change in Government.
Attached: Backgrounder on carbon credits
Inquiries: Roger Dickie
Kyoto Forestry Association
Ph: 027 486 1560
Introduction to Carbon Credits
Kyoto carbon credits are earned by those individuals and businesses that sequestered carbon by planting new forestry since the Kyoto Protocol’s baseline of 1 January 1990, and by those industries which have cut their carbon emissions since then.
Through the 1990s and early part of this decade, Government officials made clear that forestry investors would gain financially from the credits, which are a clear property right, as confirmed by the Treasury. New Zealand Foreign Minister Phil Goff also told foreign governments that New Zealand forest owners would own the credits.
This fuelled a planting boom through the 1990s with 30,000 ordinary New Zealanders and forestry companies putting up as much as $400 million per annum of their own risk capital to invest in more than 600,000 hectares of new forest – both because of the benefits predicted to arise both from the sale of wood products and from carbon credits earned from carbon sequestration.
Since the Government first indicated that it intended to confiscate the credits in 2002, tree planting in New Zealand has plunged and New Zealand is now experiencing net deforestation for the first time in living memory.
The Government has previously indicated it would limit its confiscation of the credits to those associated with the First Commitment Period of the Kyoto Protocol, costing forest owners nationwide as much as $2.5 billion, or $1.25 billion according to the Government’s calculations, depending on the market value of carbon credits. Now, however, Government officials are indicating it may extend the confiscation to the Second Commitment Period, putting eventual losses nationwide up to at least $8 billion.
The Government is also proposing a retrospective tax of up to $13,000 per hectare on the owners of forests planted before 1 January 1990, if those forest owners decide to convert their land to another land use.
MAF has carried out a consultation process on these and other ideas to address climate change. The deadline for submissions was 30 March and 3,500 were received. Other forest owners asked for an extension to this deadline but Forestry Minister Jim Anderton refused.
The confiscation of the credits, the proposed retrospective tax and Mr Anderton’s handling of the forestry portfolio have received near-unanimous condemnation at the MAF consultation meetings, with forest owners even in his home town of Christchurch calling on him to resign.
More positively, the National, Green, Maori and ACT parties have broadly supported the forestry industry on the question of carbon credits.