Carbon tax: Now we need policies that encourage forestry

21 Dec 2005

The NZ Forest Owners Association says it welcomes the decision by government to remove the carbon tax in its current form.

"Although such a tax would have limited direct impact on the forest growers, it had the potential to compromise the international competitiveness of wood processing in New Zealand. Current and potential investors saw the tax as a negative," says association president Peter Berg.

"In any event, it was always questionable whether a carbon tax would have been effective in lowering emissions, as opposed to being yet another a revenue gathering mechanism."

Chief executive David Rhodes says one of the major planks in New Zealand's domestic climate change policy has been removed, raising questions about how the country's Kyoto obligations will now be met.

"If New Zealand is serious about lowering the use of fossil fuels and reducing greenhouse gas emissions then we have to be open to technological innovation. One area that is gaining strong recognition internationally, and which New Zealand could capitalise on, is the use of biofuels —an area where forestry could make a major contribution," he says.

"It is now critical that forestry is able to deliver on its carbon absorbing potential and that means getting the policy signals right for the forest growing sector."

Mr Rhodes says a priority is to get rid of the retrospective and equitable deforestation tax. He also says appropriate recognition needs to be given to those who are creating carbon credits, as is being done in other parts of the world.

"Removing deforestation liabilities is part of the answer, providing credit for carbon absorption is the other."

In that sense he says forest owners welcome the messages arising from the government’s just completed climate change review.

"However we are disappointed that some of the negative aspects of current policies were not dealt with immediately. Obviously we are concerned at any further delays in rectifying policies which are having an adverse impact on forest owners.

"That said, we look forward to providing further input to the development of appropriate policy for the sector and remain hopeful that these solutions can be implemented early in the New Year."

Mr Rhodes says the minister of forestry initiated a dialogue about forest-related aspects of the climate change policy, following discussions with the industry. This dialogue has continued for several months and has had a significant influence on the current review.

"There is now a formal conclusion that forestry is the key to New Zealand's ability to mitigate climate change, that current policies relating to forestry are inappropriate, and that something needs to change."

Forest owners say minister Anderton has always been aware of the potential of the forest sector and they are appreciative of his involvement to date in trying to realise this potential.

"The minister has acknowledged that forestry is currently being inequitably treated and that the benefits provided by forestry are being inadequately recognised," Mr Rhodes says.

"This is most visible in the topical area of carbon sequestration, but the minister quite rightly notes a range of other values that are being made which often are overlooked. These include contributions such as soil and infrastructure protection, water quality and biodiversity improvements, recreational benefits, and habitat for endangered species."

Forest owners say their engagement with government to date has been effective in drawing the link between these benefits, particularly carbon, and the impact of existing policy. The minister has acknowledged this input and the need to now consider alternative policy approaches.

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For more information, please contact:

David Rhodes, chief executive, NZFOA Tel: 04 473 4769. Mobile: 0274 955 525